Last weekend bought bad news in Berlin. Not only did the French electorate vote out German Chancellor Angela Merkel's staunchest ally in these dark times for the Eurozone, Nicolas Sarkozy, but the Greek electorate shaved their endorsement for the two centrist pro-austerity parties from 80% to 32%. Now Athens is without a credible government as each party tries and fails to form a workable coalition.

It is almost certain that Greece will have another election come June. But what then? Without a strong pro-austerity government the chances are that Greece will have to exit the Eurozone. This will not just be an economic blow, but a political one for the architects of the European project.

The fear must surely be that the markets will then turn their attentions to Spain, Portugal and Italy where debts €" either private or public €" are forcing similar public spending cuts. Spain and Portugal are especially vulnerable to go the way of Greece. However what could save them is a new firewall to prevent a domino effect on the continent.

Germany finds itself in a position without precedent: the leader of a newly established federal polity, its paymaster and ruler, (albeit a collegiate one, Berlin would argue). But this quasi-imperial structure seems to jar with the country-centric thinking of European leaders, as the politics of the continent are still mainly focused at the national level even though it overlaps with a supranational political and economic structure.

With their rapidly ageing populations, Eurozone countries must urgently reform their rigid labour markets, putting back retirement ages and cutting old age pension and social security spending. Even if the political will to do all of that exists, it still means that the economic output in the Eurozone will necessarily shrink owing to declining populations.

It cannot be repeated enough that with their sub-replacement fertility levels and soaring emigration rates, European countries could be destroyed even before they get to the point of fiscal sanity. Take Germany, which on current trends will see its population fall by 16 million people in the next few decades. In 10 years time there will be at least 500,000 less people in Spain than today.

Further mass immigration from outside Europe is politically unpalatable for most European governments and the capacity of European countries to supply each other with more workers is negligible (since, with the exceptions of France and Ireland, all Eurozone countries have sub-replacement fertility and the Netherlands and Finland are only slightly above German, Greek and Italian levels). Even Eastern European fertility is deathly low.

For Germany this poses an almost intractable problem. In the short-term, a fall in population is likely to boost employment (this may already explain why Germany's unemployment is comparatively low as the country's population has already begun to fall), but eventually less workers will mean less economic output. Robots can build cars. But they cannot buy them.

If Germany will not go outside of the West for new workers, it could bring in Greeks and Spaniards. Some have already come in. But Germany needs the Eurozone as a whole to grow because a) it represents its biggest export market and b) it cannot afford to continue to bailout a whole continent. More workers leaving the likes of Greece and Spain will undermine those countries' recoveries, especially since those who are leaving are, for the most part, educated graduates and professionals. Germany needs Spaniards and Greeks to buy German cars in Spain and Greece, not just make German cars in Germany.

Moreover for most Europeans, destinations outside of Europe are proving the most popular: Argentina for the Spaniards and Italians, Brazil for the Portuguese, Canada, Australia and New Zealand for the Greeks, Irish and Dutch. The UK and Germany are popular destinations but still less popular than the aforementioned countries.

Of course these emigrants may return. But that is a lot to hope for. Not only does history show that when Europeans leave Europe they tend to leave for good, but banking on a remigration of European workers supposes that Greeks will not have laid down roots in Australia and Spaniards will not have laid down roots in Argentina. Chances are they will.

For Germany, Italy and others, the demographic damage is done. As previously stated, only Ireland and France have replacement-level fertility in the Eurozone, and the former now has mass emigration while the latter is dependent on a minority population which many French people are becoming increasingly distrustful and resentful of.

As Kathleen Brooks in Reuters said, €the cost to bailout the [European] union from an entitlements crisis would be on a far larger scale and could bankrupt the entire currency bloc.€ While Germany remains in a healthy financial position now, it must eventually €draw down on its fiscal surpluses in future to pay for its aging population.€ Merkel is even proposing a new tax for young Germans to prepare for the country's pensions crisis.

Even though employment could go up in the short-term, in the long-run Germany's demographic shortfall €" if nothing changes €" will shrink the economy dramatically as the 21st century goes on. As The Economist put it, €The OECD predicts that, as the population ages, potential growth will drop, falling below 1% by 2020.€

Britain is now firmly out of the European project. For most people in the UK, Britain's relationship with Europe is almost EFTA+, with the most enduring bonds stretching across the North Atlantic and all the way to Oceania. Europe is becoming for Britain what it is for Russia €" a term which has a geographic, rather than a political, meaning.

As Brooks asks, €who is going to want to lend to a country that has to spend its revenue on health care and pensions rather than infrastructure and investment?€ While the deficiencies of a nation state system in a globalised era are all too apparent to see, so too are the problems associated with a multilingual supranational state. But it is not the fiscal, debt and competitiveness crises which really threaten Europe. It is the demographic crisis just around the corner.