Not a question of if, a question of when

The Euro is as responsible for the sovereign debt crisis as each of the individual state actors. Sure they borrowed vast sums of money that they could likely never pay back, but the Euro system gave them the ability to do that, and it did so at a time when falling interest rates were reducing the return on their bonds. We're only human after all.

The crisis would not have happened, at least to the degree at which it did without the Euro. Without the Euro, Greece for one would never have been able to borrow the sums of money that they did, and countries like Ireland and Spain would not have seen a housing bubble on the scale that they did. Drachma were not worth the paper they were written on, and when faced with rampant inflation a country that cannot set it's own interest rates to control said inflation can do little to improve their situation. As we saw, low interest rates which were set to help the stagnating economies of France and Germany did little to calm the housing markets in Spain and Ireland, with drastic consequences.

Furthermore when hit by a crisis, a country does have the option of devaluing their currency, which although drastic, can be used to increase export receipts, and particularly with reference to a country which is heavily reliant on tourism, the number of tourists visiting the country. Neither Greece nor Spain have this option, and as anyone will tell you, both are no longer cheap holiday destinations in the vein that they were in the 80s and 90s. Both are also suffering from unprecedented unemployment, especially among young people.

The Euro as a concept is fundamentally flawed, you cannot have a customs union where countries have not only entirely different tax regimes but also lack effective labour mobility (like it or not, language is a barrier that the EU can do little about, it has tried, and failed). Why can the United States dollar function regardless of the differences between the 50 member states? One de facto language and a large federal body which receives the majority of tax receipts. If the economy in one region begins to fail as happened with the manufacturing sectors of the Mid West, then people move to find work elsewhere. Hence the current trend of migration from states such Michigan and Ohio to Texas and Georgia. This does not happen in Europe, at least on any scale which would be of any economic benefit. Furthermore since the federal body is in receipt of the majority of tax receipts, they can make fiscal transfers to poorer states. Again the EU is not able to do this on any realistic scale.

What Merkozy wants to do, by having states submit their budgets to the EU for approval, is the first step to taking control over national budgets. The problem with that is the inherent lack of democracy in the European system, and furthermore I do not believe either, that the European Union would exercise any more fiscal responsibility than any national state actor. It would not solve the problem of labour mobility either. So the question is, how much growth we will continue to steal from future generations in order to shore up this failed project? It's not a question of if it will collapse, merely a question of when.