I have vague recollections from my childhood of watching a cartoon series called The Perils of Penelope Pitstop. Each episode consisted of a plucky Penelope being placed in perpetual peril by the dastardly Hooded Claw and subjected to his elaborate plans for her destruction. Of course, each time she escaped, either by her own ingenuity or with the help of her protectors, the Ant Hill Mob.

The current travails of the eurozone are starting to resemble a series of Penelope's adventures. The poor old eurozone keeps falling into dangerous situations, onlookers start to worry that maybe this time luck has finally run out for the single currency and then, hey presto, the euro has escaped...only for the next peril to be waiting right around the corner. 

So now, after a brief period of respite, markets have spent the past week or so getting increasingly worried about developments in Spain and once again the euro is said to be on the brink. There are two ways to look at this.

The optimistic view is to say that all this is indeed just like the cartoon series and that, although the eurozone keeps falling into trouble, in the end it will always escape and (eventually) we will have a happy ending. Sure, there may well be a prolonged and painful period of adjustment, and sure, financial markets, always prone to over-react to each bit of bad news, will continue to create lots of noise and volatility. But in the end, the eurozone will survive more or less intact (though even some of the optimists aren't too sure that a Grexit can be avoided).

The pessimistic view is to say that, unlike children's cartoons, the real world doesn't automatically deliver happy endings. The fact that the eurozone keeps falling back into difficulties is evidence of some deep and fundamental problems with the current design. Since the eurozone is no longer sustainable in its present configuration, either Europe's leaders will have to build a new and much more integrated currency union or they will have to accept a significant retreat from the single currency project.

I have a new paper on the Lowy Institute's website which sets out why I incline to the pessimistic view.