LAST week's unsuccessful German bond auction marks the end of the 'phoney war' stage of the euro crisis. With the markets having lost patience with their 'policy' of 'extend and pretend' and the Hungarian debt crisis opening up a second front to the crisis, Europe's leaders may have squandered their chance to save the single currency.
Ever since the euro crisis first erupted in October 2009, when the then newly elected Greek prime minister George Papandreou told them that his country had been cooking the books for years, Europe's leaders have failed to get a grip on the steadily worsening euro crisis.
Instead, we have had a series of stop-gap measures, all of which have unravelled within weeks or, as was the case with the most recent October 26 'solution', fell apart within two days.
This is no way to run what is still the world's second most important currency, one which up until the current crisis harboured serious ambitions of displacing the mighty dollar from the perch it has occupied at the top of the global financial system ever since the Second World War.
Now, with the very existence of the euro in doubt, what does the future hold for us here in Ireland?
For the past two years, even as we have been pummelled by our European 'partners' and forced to carry the full burden of Irish bank losses, we have been repeatedly assured that there is no alternative to our continued membership of the single currency and that all sorts of terrible things would happen to us if we left it.
To which one can only reply that we have stayed in the euro and all sorts of terrible things have happened to us anyway.
Four savage budgets which, according to figures published last week by the Institute of Taxation, have raised taxes by a cumulative €4.8bn and reduced the take-home pay of the average worker by 16 per cent. Starting on Tuesday week, we have four more hairshirt budgets to look forward to, which will raise taxes by a further €4.6bn.
If this is all we have to look forward to if we stay in the euro, can the alternatives be any worse?
For us here in Ireland, the long-running euro crisis bears more than a passing resemblance to the 1992-3 currency crisis. Remember all of those in government and the Central Bank who told us that all sorts of bad things would happen if we devalued the punt? Interest rates would rise, the economy would collapse, unemployment would soar?
Instead, when we were eventually forced to devalue in January 1993, interest rates fell, the greatest economic boom in recorded Irish history began and unemployment disappeared. Could something similar happen if we left or were ejected from the euro?
Unfortunately, our predicament is far graver now than it was in early 1993. The banks are bust. We have enormous debts. Any choice we make will have unpleasant consequences. We have two alternatives: bad and worse. However, staying in the euro is increasingly looking like a worse or even the worst choice.
However, we may not even a have a choice. While most of the doomsday thinking up to now has focused on what would happen if we either left or were ejected from the eurozone, last week's dramatic events raise the very real possibility that the eurozone will disintegrate and that instead of it shrinking to a Germanic core, the single currency might disappear altogether.
While most attention last week was concentrated on the failed German bond auction, it was what happened in Hungary, which had asked for IMF assistance, that may well seal the fate of the single currency.
We are all familiar with the fact that eurozone banks are owed more than a trillion by the so-called Piigs (Portugal, Italy, Ireland, Greece and Spain). Less well known is the fact that a similar sum is owed by "emerging" Europe, basically the former Soviet bloc and Turkey.
Which, of course, is where Hungary comes in. With most mortgages in many Central European countries, including Hungary, denominated in foreign currencies -- mainly euro and Swiss francs -- the banks which have lent this money, mainly German, Italian and Austrian, are terribly vulnerable. If, or more likely when, this second shoe drops, then the euro is probably finished in any shape or form.