Angela Merkel has been saying it for some time: when the ??euro fails, Europe fails. The Germany chancellor is right, but I would add a twist: if the euro succeeds, Europe is also likely to fail. The reason is that the policies needed to solve the eurozone crisis will destroy the European Union as we know it. In particular, they will have profound implications for countries such as the UK, Sweden, and Denmark.

The euro was introduced on the back of two errors, which the complacent policy crowd in Brussels rarely bothered to challenge. The first, now well-known, is that monetary union could exist without political integration. The second derives from it: that the EU’s euro and non-euro countries could sustainably coexist. This is the idea of the EU as a “club of clubs”. We all share the single market, but otherwise coexist in a framework of flexible and variable geometry.

The eurozone’s crisis-resolution is already unfolding a dynamic that is inconsistent with this. Last week’s decision by eurozone members to leverage the European financial stability facility will push the eurozone on a divergent path from the rest of the EU. The measure is as insufficient as previous “comprehensive plans” to deal with the crisis. But the sceptical reaction of global investors will force further measures. Eurozone members will need the European Central Bank as a lender of last resort. They will move from separate to joint liability of sovereign debt guarantees, possibly leading eventually to a eurozone bond. To solve underlying structural problems, they will need to harmonise their financial sectors, improve product and services markets, and co-ordinate labour market rules, an area now off-limits. They will have to start to co-ordinate tax policies, eventually, perhaps, introducing eurozone-level taxes.