Back in 1999, as the eurozone was coming into existence and Greece’s membership was confirmed, some commentators ‘predicted’, in Pandora-like tones, that allowing the Greeks in would lead to the demise of the new currency union. Like a Trojan Horse Greece was going to bring the eurozone down from within, the chorus went. The same doomsday scenarios have been repeated recently but the possibility of a Greek tragedy destroying the eurozone is as unlikely now as it was back then.

There is no denying that the fiscal health of some eurozone, as well as non-eurozone and non-European, countries is weak. Many factors have contributed to that, including bad fiscal management (in the case of Greece) or the need to bail out a dangerously bloated banking sector (like in the UK and US). But that does not mean the eurozone is at the verge of collapse. The fact is that the single currency has managed to weather the worst of the financial crisis with characteristic ease. It proved to be a safe harbour for its members, some of which would have met the fate of Iceland if they had kept their national currencies. A strong euro has in the past 10 years become a reserve currency second only to the dollar. Not to mention that thanks to the EU’s institutional structures the necessary co-ordination was possible when common action was needed to save the banking sector and stimulate European economies.

This is exactly why there is absolutely no chance that Greece will abandon the euro. Greece has benefited in more ways than one from its euro membership. A return to the drachma, under the current circumstances, will lead the currency to collapse, inflation and interest rates will go through the roof and borrowing will be almost impossible. Greece’s tax system and the economy as a whole are in need of reform. But these reforms can only be achieved from within the eurozone; leaving the common currency will not increase Greece’s options but dramatically reduce them.

The real issue here is that this crisis constitutes a unique opportunity. Monetary union was meant to be another step towards further political integration. So now is the time to move more decisively to the next level through fiscal integration, economic policy coordination and common labour policies if we are to guarantee the continuing success of the single currency and solidify the process of European integration that has delivered economic prosperity and peace for half a century.

In the meantime two things need to happen. First of all, eurozone members must display the necessary solidarity. That does not mean a transfer of funds from one member state to the other. Merely guaranteeing that Greece will not be allowed to default should be enough to ease off the speculative attacks on Greek, and other eurozone members’, bonds. Whatever Greece’s undeniable fiscal sins might be, what is really needed now is political support.

Secondly, serious consideration needs to be given as to whether violent budget balancing is desirable in Greece, and elsewhere in Europe, while the economy is still recovering from the effects of the credit crunch. It goes without saying that the Greek government must reform its tax system, deal with corruption-induced administrative waste and re-engineer the economy, and the Greeks have committed to that. But allowing the markets to bully governments into raising taxes and cutting expenditure at a time when the economy is still struggling to stand on its feet after a long and sustained shock is only going to make the recession last longer.