As we roll around to year-end, the European experiment survives (for now – who knows about next week?). The EU, formed in 1993, is an economic and political union of 27 independent member states, which is most of Europe. The union’s membership has grown from the six founding states – Belgium, France, Germany, Italy, Luxembourg and the Netherlands – to virtually all and sundry. 

On the other hand, the Eurozone (EZ), which was established in 1999, is a monetary union currently comprised of 17 member states who share the same currency. Logically, you can’t be in the EZ unless you are part of the EU. For instance, the UK is part of the EU but has opted out of the EZ. However, most EU members are expected to adopt the Euro.

What started out as a grand plan is now all but broken. There are major structural cracks which cannot be repaired. The only solution is to rebuild. It is possible to go on patching the dyke, but the next big storm will flood the area – and this could be next week, next month or next year. At some point the damn will burst.

What that means for the EU and EZ is that they must either change the treaty, so poor-performing countries can be kicked out, or create a ‘United States of Europe’ with one central government controlling monetary and fiscal policy. 

Whether Greeks and Spaniards could be happy with Berlin and Paris dictating their retirement age and how much they can spend on welfare seems unlikely in the short-term, a bridge too far. 

Of late, the glaring differences between countries that are fiscally responsible – the likes of Germany and Finland – and the PIIGS mean that the two groups are diametrically opposed. No amount of crisis meetings can resolve this, and the whole affair is starting to look like a circus. When the Italian Prime Minister compares himself to Napoleon in describing his achievement during his past five years in Parliament, you know the situation is doomed. 

Lest you think me too harsh, surely his comments a few weeks ago prove that his true home is the circus ring. Berlusconi said, “I am the Jesus Christ of Italian politics. I am a patient victim. I put up with everything. I sacrifice myself for everyone.” Fortunately for all, he has at last fallen on his sword, though the climactic moment was rather short of a crucifixion. 

Life goes on, I suppose. Equity and currency markets have been bouncing around like French Prime Minister Sarkozy’s new baby in a jolly jumper. Every piece of European news seems to drive a 5% move up or down in global markets. But one day, investors will tire of this, probably long before Sarkozy moves on to his fourth wife. 

What becomes, then, of the Euro, the EU and the EZ? That seems to be in the hands of the gods (Greek and Roman). Those German tribes were all pagan anyway, weren’t they?