A group of hikers has lost its way. They want to get to a castle on a hill in the distance, but the path they are on seems to be leading in a different direction, and their leader's only advice is to hurry up.

Today, the eurozone is in the same situation as those hikers. It has become increasingly clear that establishing the euro was the wrong path to take. The single currency caused an inflationary credit bubble in Southern Europe. When the bubble burst, the region's competitiveness was destroyed, and Northern Europe was called on to provide huge loan guarantees, public credit and transfers. These measures have sustained the wrong relative prices that resulted from the bubble, and papered over the underlying problem.

Meanwhile, the Schengen Agreement, which eliminated most border checks between European Union member states, has facilitated the ability of immigrants from the poorer parts of Asia and Africa to flock to Northern European welfare states in recent years.