Paul Krugman inadvertantly explains the Order ab Chao mechanism:
None of this should come as a big surprise. Long before the euro came into being, economists warned that Europe wasn’t ready for a single currency. But these warnings were ignored, and the crisis came.
Now what? A breakup of the euro is very nearly unthinkable, as a sheer matter of practicality. As Berkeley’s Barry Eichengreen puts it, an attempt to reintroduce a national currency would trigger “the mother of all financial crises.” So the only way out is forward: to make the euro work, Europe needs to move much further toward political union, so that European nations start to function more like American states.
It works like this. The government enacts a stupid policy doomed to failure. When the policy inevitably fails, the government swoops in to fix it by expanding its power. Repeat as needed. The European Union has been attempting to turn itself into a continent-wide empire for decades; now that the inherent contradictions of the Euro that were known to every economist since the idea was first broached have revealed themselves, they are being used to justify eliminating the last vestiges of national sovereignty that remain to the “member states”. There is no government failure so big that the government will not attempt to use it to expand the scope of its power. Regardless of whether their policies fail or succeed, both results are cited as evidence that more centralized power is required. On a side note, Krugman is incorrect. Spain was not fiscally responsible and could easily have prevented both its housing boom and subsequent bust despite its lack of control, (which you will recall it gave up of its free accord), over its own currency.
As for the fate of the Euro and the European Union, I suspect that the “unthinkable” will not only become entirely thinkable, it will eventually become the reality. Krugman’s refusal to contemplate the breakup of either isn’t based on any political or economic analysis, it’s mere ideological ostriching.