Both Labour and the Conservatives began this parliament intending to say as little about Europe as possible. Hemmed in by his Europhobic backbenchers on one side and the Europhile Liberal Democrats on the other, David Cameron made few commitments beyond the promise of a referendum on any future transfer of power to Brussels. Similarly, Labour, which has its own small but significant Eurosceptic wing, had no desire to reopen the debate about integration. But events, dear boy, events have intervened.

The turmoil in the eurozone has forced politicians of all parties to begin a more honest debate about the costs and benefits of Britain's membership of the EU. In the past week there have been thoughtful contributions from Mr Cameron, the shadow foreign secretary, Douglas Alexander, and the former foreign secretary David Miliband, writing in the Financial Times. A necessary preliminary to any discussion of Europe is the acknowledgement that the EU, formerly the European Community, has been a remarkable force for good. It has brought peace to a continent once ravaged by war, transformed eastern Europe and the former Mediterranean dictatorships, and vastly expanded trade and prosperity.

In his 14 November speech to Baltic and Nordic ambassadors, however, Mr Alexander was right to steer Labour away from the wilder shores of Blairite Europhilia. He was also right to declare that joining the euro is not on his party's agenda. The New Statesman has been consistently opposed to British membership of the single currency. At the time of its creation, we warned that monetary union would be economically defective without fiscal union, and politically defective without greater democracy and transparency. The Conservatives, in the person of William Hague, have sought to take retrospective credit for the decision to retain the pound, but the praise belongs to Gordon Brown and Ed Balls. In 2003 the then chancellor and his adviser thwarted Tony Blair's dream of euro membership and they have been vindicated by events during the financial crisis.

Despite the appointment of new governments in Greece and Italy (both led by unelected technocrats), the danger of the crisis deepening remains. To their credit, Conservative ministers have rejected the politics of Schadenfreude, insisting that the break-up of the euro is not in Britain's or Europe's interests. Analysts predict that the demise of the single currency could cost a peripheral country between 40 and 50 per cent of GDP in the first year and a core country 20-25 per cent.

Where the Tories have been opportunistic is in suggesting that the eurozone crisis is entirely to blame for Britain's economic woes. George Osborne declared that "growth in Britain, jobs in Britain, have been hit by what's going on in the eurozone". Yet the problem for the Chancellor is that the collapse of economic growth and the surge in unemployment, which now stands at 2.62 million (8.3 per cent), pre-dated the crisis in the eurozone. They were the inevitable result of Mr Osborne's excessive austerity measures and his claim that Britain was on "the brink of bankruptcy", a statement that had a chilling effect on consumer confidence.

Austerity has also failed in Europe. As Richard J Evans, one of our most eminent historians of Nazi Germany, argues on page 22, for the eurozone to survive, Germany must set aside its historic reservations and empower the European Central Bank to act as a lender of last resort while also engaging in fiscal stimulus. The times demand a bold, even heroic, act of statecraft from Angela Merkel. Should she prove unequal to the challenge, Europe's hard-won freedom and prosperity could be lost for a generation.