The Economist frets about the state of the euro zone:

Europe’s leaders are sleepwalking through an economic wasteland…The euro-zone economy has just endured a sixth successive quarter of shrinking GDP. The malaise is spreading to core countries including Finland and the Netherlands, which both contracted in the first quarter. Retail sales are falling. Unemployment, above 12%, is a record—with more than one in four Spaniards out of work (see article). In spite of savage spending cuts, government deficits are persistent and high. The sum of government, household and company debt is still excessive. Banks are undercapitalised and international lenders worry about their as-yet-unrecognised losses. Although official interest rates are low, firms in southern Europe are suffering a cruel credit crunch. All this is causing economic hardship today and eating away at the prospects for growth tomorrow. The euro zone may not be about to collapse, but the calm in Brussels is not so much a sign of convalescence as of decay.

All true, but The Economist’s prescriptions would embarrass a sand-helmeted ostrich.

Free trade with the U.S., sure. But it’s not going to happen any time soon, if ever. Ease up a bit on austerity. Fine, there’s decent evidence that some of it has proved counter-productive, but as to how those deficits are going to be funded . . . Loot the taxpayers in the euro-zone north (“[use] cash from the core euro zone”) yet again, this time to pay for “schemes to boost youth employment and investment in small and medium-sized firms in the periphery.” Drops in the bucket. More meaningfully, The Economist appears to support the banking union that would take the euro zone substantially closer to the fiscal union that the voters in many countries (often for different reasons in different countries) do not appear to support.

And there’s the rub. The Economist notes, accurately enough, that “voters want the euro zone to stay together. On the other, they will not back the difficult reforms needed to pull it out of the crisis.” That’s not much of a democratic mandate for keeping this misbegotten currency alive, at least in its present shape.

The Economist concludes:

For as long as stagnation and recession tear at democracy, the euro zone risks a fatal popular rejection. If the sleepwalkers care about their currency and their people, they need to wake up.

Fatal? One can only hope. The euro is a menace to Europe’s economic future and an assault on its nations’ democracy. If the sleepwalkers care about their peoples, their prosperity, and their democracy, they do indeed need to wake up, and arrange the smoothest transition they can (it won’t be easy) to a new currency regime.

The northern euro would be a very good start.