Economist Vicenç Navarro deals at Rebelión[es] with the difficult economical and political situation of EU under the euro.
He first considers how the implementation of the single coin with its draconian budgetary demands, was meant to damage the popular classes, which are almost invariably those who benefit from public expenditure, perpetuating, in the case of Spain, the inequalities established by the fascist dictatorship.
Then he travels to other EU states such as Letonia (GDP down 25%, unemployment up to 22%) or France (69% against the euro), while despising IMF's and Krugman's suggestions of reduction of salaries (how do you expect people to pay for the cost of life, if they can't already?)
Then it goes to offer a constructive alternative, that I detail here:
1. Creation of a true European federation, really democratic and participative, including a real instance of economic and monetary coordination at EU level, which does not exist now.
2. A EU budget that, as suggested by the "founding fathers", should be at least 7-9% of the GDP.
3. A Central Bank that is dependent of political institutions: European government and parliament.
4. A pan-European Social Pact, producing pan-European workers' statutes with legal weight.
5. A radical change of the criteria of Maastrich and the Stability Pact, emphasizing the Development component and prioritizing economic growth and employment creation.
6. Alter the draconian limits on deficit, allowing for more deficit than just 3% of GDP and for more debt than just 60% of the state's budget.
7. Instruct the Central Bank to have a role in the generation of European bonds that would help states to solve their punctual budgetary crisis in harsh times like these.
8. Do not allow that any state can be brought to the limit of not being able to pay its debt: creating a EU common front against such eventualities.
9. Establish a EU tax that would feed a common fund with purposes such as redistribution policies that stimulate economic growth, employment generation, etc.
However, I'd say this is not enough. This would have worked if implemented in the 90s or early 2000s but now it is already too late: the only solution for EU (and all capitalist regimes throughout the world) is true socialism. European federation? Sure but under a red banner (and of course with a real red policy).
Of course in the meanwhile, we will witness some of this, with a likely devaluation of the euro in order to allow some competition. Getting out of the common coin is not any realistic option (people would continue using, or at least treasuring, the euro while it exists, because it's stronger and would not get devaluated every other day: think Milosevic's Serbia, where salaries used to be named in German marks) and kicking a country out of it is not either (same reasons, plus political tensions).
This context really only allows for one exit: the creation of a European super-state that rules the economy somehow. But liberals (capitalists) don't want that: their whole (misguided) goal was to create a common market without efficient, much less democratic, federal institutions. This is a total nonsense proper of that engender known as Reaganomics (less state, more "market"). No "market" solutions, of the likes of the IMF, are really possible in this context. Blowing up the euro is not an option either (if it ever happens it will cause much more grief and problems than anything else, not just locally but at the whole EU level).
However a social-democrat federal EU as Navarro suggests is totally inviable, first of all because there are not anymore any social-democrats around. Sure there are a lot that call themselves that way but the only thing they do is to bow their heads to the IMF and the liberal policies of Brussels. And they don't have anymore any project of their own. In the past even the right used to be somewhat social-democrat, now it's the opposite and it doesn't look like the minds involved would ever be able to challenge their "market" fetishes, much less the mega-corporations that rule them, in order to achieve a viable Europe for the people.
That is not their goal anymore: they are all too corrupt, too involved with the global capitalism to dare think in terms of Europe.
Hence the only alternative is to break the molds and forge a new Europe of the people. But this, admittedly will not happen in the next few years, so I foresee a steep path of decline and further chaos, not only affecting EU but all Earth (after all EU is a major market and supplier for nearly everybody else). Eventually the European working class will realize their situation, get organized and take over. But it will take some time for the whole process to complete, sadly.