urope has not been doing well. Just this year, GDP per capita for the Eurozone as a whole finally returned to pre-crisis levels. It is claiming victory in Spain--even though unemployment remains near 20% and youth unemployment is more than twice that--simply because things are better today than they have been since the euro crisis began a half decade ago. Greece remains in a severe depression. Growth for the Eurozone over the past year has been an anemic 1.6%, and that number is twice the average growth rate from 2005 to 2015. Historians are already speaking of the Eurozone's lost decade, and it's possible they'll soon be writing about its last decade, too.

The euro was introduced in 2002, but the cracks in the single currency arrangement, which began in 1999, became evident with the 2008 global financial crisis. Economists had predicted that the test of the euro would occur when the region faced a shock, and Europe was unlucky in facing such a big shock coming from across the Atlantic so soon after its creation. By 2010, the euro crisis had become full blown, with interest rates on the sovereign debt of the "periphery"--Greece, Spain, Ireland, and Portugal--soaring to unheard-of levels. But a closer look at the Eurozone shows imbalances building up from the very beginning--with money rushing into the periphery countries in the misguided belief that eliminating exchange rate risk had somehow eliminated all risk.

This illustrates one of the key flaws in the construction of the Eurozone: It was based on the belief that if only government didn't mess things up--if it kept deficits below 3% of GDP, debt below 60% of GDP, and inflation below 2% per annum--the market would ensure growth and stability. Those numbers, and the underlying ideas, had no basis in either theory or evidence. Ireland and Spain, two of the worst afflicted countries, actually had surpluses before the crisis. The crisis caused their deficits and debt, not the other way around.