EMU går i graven.

Jean-Paul Juncker, premiärminister i Luxemburg och ordförande i eurogruppen, sade en gång om ekonomiska reformer: ”Vi vet alla vad vi måste göra, vi vet bara inte vara hur vi ska bli omvalda efter att vi gjort det.”

Send in the clowns
How Beppe Grillo and Silvio Berlusconi threaten the future of Italy and the euro

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This result is a disaster for Italy and for Europe. In Rome the centre-left coalition headed by Pier Luigi Bersani, the pre-election favourite who ended up getting only a whisker more of the vote than Mr Berlusconi, is now struggling to form a government: it is unlikely to be stable or durable

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In fact the danger is less of break-up than of stagnation. This was the week, history may conclude, when Europeans made clear that they were not interested in reform. Nine months after the French ran away from change, the Italians sprinted past them. As many as two-thirds of Italians rejected not only German-imposed austerity but the entire reform agenda that was designed to improve their economy’s dismal record of near-zero growth. Follow that path, and it leads to the economic paralysis and political decline that Japan has endured for the past 20 years.

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Too big to fail or to bail

This is dangerous. It is hard to see Italy remaining in the single currency in such dire straits—and equally hard to imagine the euro surviving if it falls out. Italy is the euro zone’s third-biggest economy and, although its budget deficit is quite small, it has the biggest stock of public debt (at almost 130% of GDP). This makes it too big to bail out.

But without growth, Italy will not be able to service its debts. The possible pattern is clear: a series of crisis meetings, a few half-hearted efforts at reform to buy off Germany’s Angela Merkel, not enough growth, too much austerity, and then another crisis. The euro survives, but at immense economic cost. The euro zone becomes Japan.

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Deep recession and rising unemployment across the Mediterranean countries are triggering a popular backlash. Structural reforms continue to be essential if southern countries in the euro are to win back competitiveness and rekindle growth. But, given the voters’ response and the scale of recession, the pressure for continued fiscal austerity should now ease.

The irony is that both of Italy’s clowns have got one thing right. Mr Grillo was right about Italy’s overpaid and corrupt politicians. Mr Berlusconi was right that austerity alone will not solve Europe’s crisis. Yet that does not mean Italians can run away from their predicament. If they continue to reject reforms, reality will catch up with them. Whatever the clowns may tell you, that is not funny.