Two solutions are possible. You can adjust the currency to match the government, scrapping the euro and reintroducing the old national currencies. Or you can adjust the government to match the currency, transforming the European Central Bank into a lender of last resort (like the US Fed) and giving Brussels budget-making power over the whole continent. Germans want no part of reforming the ECB — that would mean having prudent countries cover the debts of profligate ones. But Germans are intrigued by the other idea — that of a full-blown fiscal union. In their minds, it will involve nothing more disruptive than inserting punctilious German accountants into ministries in Athens or Lisbon. But they are wrong. Fiscal union means surrendering national budget authority, and a state without authority over its own budget is not a state. Disbanding their nation-states was not the deal the peoples of Europe thought they were making when they consented to "ever-closer union". 

Germany is not pursuing these manoeuvres out of malice. Nor did it design the infernal machine that makes them necessary. The main thrust of European consolidation has always been anti-democratic, whether avowedly or not. But the move away from democracy, sovereignty and accountability has taken on a new élan as Germany has moved to Europe's fore. Let us face squarely the way that Germany's neighbours see its role: Germany re-emerges on to the scene of European power politics for the first time in well over half a century, and its first project — which it pursues with a culpable zeal — is that of depriving various southern European peoples of their statehood.

Wherever democratic forms have been flouted, Germany has been a pivotal actor. Last summer, Italy's elected (remember that word) prime minister, Silvio Berlusconi, agreed to a fiscal consolidation package in exchange for the ECB purchasing some of Italy's €2 trillion in outstanding debt. Once his financing was secured, he reneged. It was a dastardly trick, one for which Italians should have held Berlusconi accountable. Instead, Germans held Berlusconi accountable. In November, Merkel intervened with the Italian president, Giorgio Napolitano, who appointed Mario Monti a senator-for-life (perhaps the most famous holder of that title since General Augusto Pinochet of Chile) and presented him to Italians as their take-it-or-leave-it next premier. Monti is a first-rate economist and a gifted politician. Colleagues praise his work as EU competition commissioner. But the peripheral question of whether the  unelected Monti is a better person than Berlusconi should not distract us from the primary question, which is Italian sovereignty.

At roughly the same time, European leaders presented Greek prime minister George Papandreou with a new austerity plan. Given that it would bind his countrymen for at least a generation and that no credible economist gave it any chance of working, Papandreou proposed putting it to a referendum. At that point, Nicolas Sarkozy, the French president, and Angela Merkel — speaking as the leaders of individual nations, not as representatives of the eurozone — offered Greece the choice between replacing Papandreou or getting kicked out of the euro family. Greece buckled. In mid-February, the German finance minister Wolfgang Schäuble suggested in a radio interview that Greece cancel its elections, due in April, and install a technocratic government on the Italian model instead. 

"This is all a German racket designed to take over the whole of Europe," said one politician. "I'm not against giving up sovereignty in principle, but not to this lot. You might just as well give it to  Adolf Hitler, frankly." As it happens, that was the late British trade    secretary Nicholas Ridley, assessing the likely consequences of monetary union in the Spectator interview that ended his career in 1990. But his worries find an echo in the assessment of today's Greek politicians. As the conservative George Karatzaferis said in February, "We could do without the German boot."