A rising tide of integrationist ambition swept the single currency on to the European shore in the 1990s.
Now, it is in danger of becoming a beached whale.
Further expansion of the eurozone is undesirable until its core economies have demonstrated their ability to make the system work, both economically and politically.
Martin Wolf Financial Times 8/6 2005

Economists argue about the necessary and sufficient conditions for a successful single currency. But the majority would agree that it helps if the area in question is subject to common shocks, markets for goods, services, capital and labour are flexible, the overall economy is dynamic and, not least, there is a shared identity embedded in common political institutions

Not one of these conditions is either necessary or sufficient. But the absence of all four creates a huge challenge. Yet this is precisely where the eurozone now finds itself: economies have diverged; growth is disappointing; markets are proving dysfunctional; and the movement towards further political integration is now in peril.

Yet, whatever the difficulties in sustaining the union, the costs of exit look far worse. Suppose that a country wished to exit from the euro and recreate its national currency, in order to depreciate, as suggested by Roberto Maroni, the maverick Italian welfare minister. Any such depreciation would raise the cost of the stock of debt. A highly indebted government would have a choice between redenominating its euro debt in a new national currency or defaulting. Either possibility would create a financial crisis and be tantamount to a withdrawal from the European legal order. As soon as this possibility became real, the interest rate spreads would become prohibitive, thereby triggering the crisis.

What, then, is going to happen? That this has now become a question is being noticed in the markets,

Further expansion of the eurozone is undesirable until its core economies have demonstrated their ability to make the system work, both economically and politically.

Finally, if there is to be further political integration, it should logically be within the eurozone.

In an article published on December 3 1991, just before the Maastricht treaty was negotiated, I argued that "the effort to bind states together may lead, instead, to a huge increase in frictions among them. If so the event would meet the classical definition of tragedy: hubris (arrogance), ate (folly); nemesis (destruction)."

The euro was a heroic project. Its members cannot now afford to let it fail. But the attitudes shown over the past week make such failure more likely.

No currency union is likely to survive without either the economic or the political conditions of success.

The struggle for the constitutional treaty is over. The battle for a successful currency union has begun.

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".......the Battle of France is over. The Battle of Britain is about to begin, upon this battle depends the survival of Christian civilization, upon it depends our own British life and the long continuity of our institution and our Empire."
Winston Churchill, June 18, 1940