To some who went through the unsuccessful struggle from 1961 to 1967 to stave off sterling devaluation, the series of crises surrounding the euro will be drearily familiar. First there is a surprise loss of confidence. Then there is a series of rescue operations, usually taking the form of international guarantees of one kind or another. These are backed up by domestic restrictive measures leading to a domestic recession of sorts. In time the financial pressures ease and near-normality is seen to return. But then, when few are looking, there is another crisis, another set of international rescues and another set of domestic restrictions. And so on. Eventually the struggle is abandoned, and political and financial leaders work to pick up the pieces.

As the countries in the eurozone have abandoned their own national currencies, the pressures have been felt in widening interest differentials between German government securities and those of peripheral member countries. The series of rescue operations has already begun and the euro is said to have been “saved”. We can guess the rest of the story. The disintegration is likely to be a messy process and it will take time to clarify whether there will be a reversion to national currencies or whether two or three successor zones will emerge. Indeed, the insistence of the German government on impossibly severe fiscal policies makes one wonder if it really wants the euro to continue in its present form. Wolfgang Sch?uble, the German finance minister, has said: “Should a eurozone member ultimately find itself unable to consolidate its budgets or restore its competitiveness, this country should as a last resort exit the monetary union while being able to remain a member of the EU.” It is not a very profound insight that if one country were to exit, the financial spotlight would turn on the most vulnerable of the remaining members.

The fundamental instability of the present eurozone has been exhaustively analysed by the economist Christopher Smallwood in a Capital Economics paper. (“Why the euro needs to break up”). Mr Smallwood, who was for several years policy director of the pro-EU British Social Democratic party, is unlikely to have an anti-European bias. He has no difficulty in showing how unrealistic are the spending cuts and tax increases to which the Mediterranean governments have pledged themselves in return for support from their euro partners and the International Monetary Fund. Immediate fiscal tightening in Greece amounts to 7 per cent of the country’s gross domestic product and makes George Osborne, Britain’s chancellor of the exchequer, look like a cooing dove. Attempted tightening on this scale would dampen the economy and risk creating a vicious cycle of debt and deflation.