The sovereign debt crisis that rolled through the eurozone between 2010 and 2012 followed a pattern that economists found easier to identify in retrospect than to arrest in real time. Each country's crisis was presented as exceptional — the result of specific national failures, a profligate government here, a real estate bubble there — and each bailout was framed as a firewall that would prevent contagion from spreading to the next country. The firewalls failed, sequentially and predictably, because the underlying problem was not national but structural.

Greece went first, in May 2010, with a €110 billion rescue package from the European Union and International Monetary Fund that came attached to austerity conditions so severe that they generated protests, strikes, and eventually a political crisis that threatened the country's membership in the eurozone. The austerity conditions were based on growth projections that the IMF would later acknowledge were significantly too optimistic.

Ireland followed in November 2010, in a crisis triggered not by government profligacy but by the government's decision to guarantee the liabilities of its failing banks — transforming a banking crisis into a sovereign debt crisis with a speed that left Irish officials describing the experience in terms more appropriate to natural disaster than policy failure.

Portugal came in May 2011, Spain and Cyprus in 2012. Each country's citizens experienced the crisis as a sudden external imposition, a loss of economic sovereignty to institutions in Brussels and Frankfurt whose democratic legitimacy was, to put it charitably, indirect.

What the crisis revealed about the euro project was something that critics had warned about at the currency's creation: a monetary union without a fiscal union meant that the mechanism for adjusting to economic shocks — currency devaluation — had been removed, while the alternative mechanisms — cross-border fiscal transfers, labor mobility, wage flexibility — remained underdeveloped. Countries could no longer devalue their way out of difficulty. They could only suffer through it.