If you merge 16 small open economies, you get a large closed economy. But here is the catch. If you assemble the leaders of the 16 small open economies, you get a roomful of 16 small-economy politicians. Economic governance through the European Council has proved always cacophonous and often incompetent. It is an institutional framework of finger-pointing. The Irish say they are not Greece. The Portuguese say they are not Irish. The Spanish finance minister said last week that Spain is not Portugal. There are no prizes for guessing what Italy is not.

This governance paradox lies at the heart of the eurozone crisis. It explains, for example, why in the middle of an existential banking crisis, there has been a debate about the Irish corporate tax rate. The French and Germans have argued that Ireland's ultra-low taxes are distorting competition. The Irish say they need a low tax rate to attract foreign direct investment. It is hard to conceive of an issue that is less relevant to the current problem.

The task that needs to be solved now is to stop contagion of the Irish banking crisis. The channels are easy to figure out. The two largest creditors to Ireland are the UK and Germany, with loans outstanding of $149bn and $139bn respectively, according to data from the Bank for International Settlements. An Irish bank default would affect the German and British banking systems directly, and require significant domestic bank bail-outs.

David Fuller's view The creation European Economic Community (EEC) in 1957, also known as the Common Market, was a political decision, not least to bind European countries more closely together and prevent them from waging war against each other once again. The EEC had evolved into a European Union (EU) of 11 countries when the euro was launched on January 1st, 1999. Other European countries applied to join the EU for greater access to the regions markets, the development aid available and because they could also receive Germany's low interest rates.

However the EU was never an ideal candidate for a single currency because: it did not have a centrally controlled fiscal policy, or full mobility of labour, and it did not have a common language. These disadvantages remain.

Can the euro survive? Yes, as long as Germany wishes to remain involved. I assume that the euro would collapse if Germany itself decided to leave the single currency. Additionally, I have never assumed that every country which joined the euro would remain a member.

I have long agreed that a much closer fiscal union is essential to the euro's long-term survival, although this would not be easy to achieve politically. I do not agree with some commentators that the solution to Euroland's problems is to make Germany more like the other member states, meaning less emphasis on private savings and an export-driven economy.

Europe can probably contain its latest crisis involving Ireland but that is not the same as a solution, just as Brussels and the European Central Bank do not really have a solution for the Southern European debt crisis. I find it difficult to envisage a permanent solution because I cannot see how the troubled economies can compete with Germany, under the current system within a single currency.