Imagine a corner shop that is not doing well. At best it cannot provide its owner with a minimum standard of living. At worst it cannot even cover its costs and is kept going by loans and donations from relations, friends and well-wishers. One of these was even heard to remark that that he would do what was necessary to keep the shop going, and added: “Believe me, it will be enough”.

All analogies are imperfect but this one is quite near the mark for the eurozone’s uncompetitive members. Since the euro was inaugurated in 1999, German unit labour costs have risen by less than a cumulative 13 per cent. During this time, Greek, Spanish and Portuguese labour costs have risen by 20 to 30 per cent, and Italian ones by even more. It is hardly surprising that Germany has a current account surplus of 6 per cent of gross domestic product, while Greece, Italy, Portugal and Spain have a bare balance. Estimates need to be taken with a very large pinch of salt but their general message is all too plausible. No so-called banking union or fiscal harmonisation will suffice while these imbalances remain.

The economic theory – such as there was – behind the creation of the euro was that the single currency itself, and the supposed impossibility of devaluation by members, would act as a harmonising force. But this has not happened and present relationships have become unsustainable. Herbert Stein, an economist active in Washington towards the end of the last century, said that if a policy or situation was unsustainable, it would not be sustained. But he did not indicate how long it would take for such situations to unravel.