"A Franco-German monetary union was an ambitious project. But the half dozen potential members of such a union mostly had political and economic institutions sufficiently robust to handle the consequences. The success of such a project over the past decade might have provided a springboard for expansion.

But an excess of ambition extended membership of the eurozone to states that were neither willing nor able to accept the economic disciplines that replaced those imposed by the currency market. These states were enabled to escape serious consequences by funding budget and trade deficits through public and private borrowing. They will continue to be able to do so until creditors believe they will not be repaid – which would, if the new stability fund were to succeed in its objectives, mean that they could continue these policies for ever. The eurozone’s difficulties have been created by member states not markets, giving members more resources to fight markets makes things worse, not better."

(Europe’s elite is fighting reality and will lose, John Kay, 26/10/2011)