The eurozone must shrink - and will

If the architects of the euro planned it to fail, to make fiscal and fuller political union necessary, their imaginations failed them.

Why would any country welcome more integration when it was already in the grip of an economic squeeze? Especially as closer integration would bring the prospect of the squeeze continuing and tightening - with no effective way for the citizens to bring pressure on their masters to change it.

Eric Edmond explains how the economics point to the eurozone splitting in two, the northern part in a new 'mark zone', the southern part keeping a devalued euro. But "will it happen?" he asks. "I doubt it." For Ambrose, the two halves are locked together in a broken marriage.

Greece and Spain, for two, are already suffering. For ordinary Greeks the big bailout adds up to years of hardship, while Spain's jobless rate has reached 21.5%, and more and more jobless Spaniards are seeing their unemployment benefits expire - some 560,000 people have no support at all. If subsidies from the EU don't make up for individuals' worsening poverty - and no hope that it would be relieved in the short term - why would they vote for more of this?

Greece is a crooked economy, Spain is trying but is hamstrung by its regional governments, and Italy is probably incapable of any real economic reform at all. In Portugal real M1 deposits have fallen at an annualised rate of 21% over the past six months, buckling violently in September. Recession beckons. As Ambrose summarises:

Europe’s leaders are betting that a reduction of red tape and a radical shake-up of the labour markets will unleash growth in Greece, Portugal, Italy and Spain, a decade hence. In the meantime, the governments of these near helpless countries must soldier on with perma-slump, and riot gear, and pray for a miracle.

Democracy won't tolerate this - especially at the hands of unaccountable foreigners. So the eurozone in its present form is doomed.