Fiscal Union in the Eurozone

Today, Eurozone leaders took a major step to bolster the union by agreeing to negotiate a legally binding package of rules to reduce sovereign control over domestic fiscal policies.  This 'doubling down' will either strengthen the EU or take it down faster.  It might strengthen the EU because Brussels will now have the right to intervene directly in national fiscal policies to enforce austerity measures.  It might work in the opposite direction because strong ties in a networked organization, of which the EU is, work to propogate shocks across the system with greater fidelity and speed.  

In order to mitigate the impact of these shocks, a networked organization will require more slack resources (e.g., national reserve requirements will have to go up) and higher barriers against exogenous sources of uncertainty (e.g., limits on currency movement in and out of the zone). 

What appears to be a desperate attempt to stave off the break up of the EU may reduce global trade by slowing down the movement of capital across regions.  In order to protect themselves, one can imagine similar measures by ASEAN, APEC, NAFTA, and so on.