The "crunch" Eurozone deal will destroy what little hope is left for saving our currency.

As I write, Europe's leaders are gathered in France and Belgium to agree fiscal restraints, in the hope that this will encourage the ECB to finally come to the rescue with sufficient liquidity to make a difference.

However, their plan is fatally flawed. I do not disagree with fiscal restraints in principle, but in the common currency Eurozone area they are going to end what chance the currency has of surviving. The Eurozone's problem is not that certain countries have been profligate, rather it was the wrong countries that were profligate. In the run up to the present crisis, those countries at the top of their economic cycle were running balance of payments deficits and those countries which which were struggling under economic adjustments were running balance of payments surpluses. This is a natural feature of human nature: when times are bad you want to work to improve your situation, when times are good, you feel confident to let things go a bit.

But imposing a fiscal straight jacket on EZ countries is not the solution, our members are locked into an inappropriate monetary policy and only have fiscal measures to compensate. The ability to borrow "appropriately" to stabilise economic cycles is not necessarily a bad thing.

The one size fits all monetary policy of the ECB meant that the boom countries could not rely on monetary policy to rein in their economies, just as the slower-growing countries wanted a more liberal monetary policy. We effectively removed a tool of economic adjustment. If we had been wise, we would have used fiscal policy to compensate for these stresses, but that's all history now. But now, we are proposing to impose restraints on our fiscal policys, limiting the only remaining tool for intervening in the economy. How this is supposed to make the Eurozone more stable is a mystery. This can only work if state profligacy was the problem all along. In some boom countries, state profligacy did occur, but it was the result of inappropriately loose monetary policy. Fiscal union is the correct solution for profligacy, but profligacy is not the problem. This plan is the answer of those who do not really understand what has happened.

In other peripheral countries, where fiscal profligacy was eschewed, the result was massive private borrowing, fuelling asset bubbles (such as Ireland and Spain). Public spending in these countries, was if anything more restrained than in the core countries that have come through this crisis best. By imposing rigorous fiscal rules on all EZ countries, we will avert future Greeces and Italys, but because we fail to address the real problem, we will spawn a series of Ireland's and Spains. This proposed plan will spell the end of the common currency within a generation.

This policy may serve a political purpose, but it does not fix the eurozone -nothing but a transfer union can fix the Euro. I personally don't want to see this and think we should seek to leave this currency at the first opportunity. Though I'm a europhile, I think it's time to kiss goodbye to a common currency.