The markets have been pleased of late because of a belief that the European debt crisis will resolve itself. The European Central Bank could step in and purchase sovereign bonds, if they can get Germany to sign off. Spain is inching toward a formal request for bailout funds, which is what the ECB wants so they can impose the reforms they have sought. And there’s just a general sense that European leaders will juggle enough balls in the air to keep the euro from collapse.

If only that were the sole problem in Europe. If only that were the main problem in Europe. Solving the debt crisis when they are at the midpoint of a lost decade with no end in sight is tantamount to getting a tourniquet for one arm while the other arm has fallen off.

The euro zone is hurtling back into recession, economists declared after official figures this week portrayed a shrinking economy. But by some measures the downturn has been under way for years.

With the exception of Germany, none of Europe’s biggest economies have returned to the level of economic output they had at the beginning of 2008, before the subprime mortgage crisis in the United States spread across the Atlantic, according to calculations by two U.S. economists, Peter Rupert and Thomas F. Cooley.

The figures suggest that Europe is already well into what could become a lost decade — a period of pernicious stagnation and wasted potential that could have lasting effects on ordinary citizens.

Economic growth not realized represents investments in education that were never made, research that was never financed, businesses that failed and careers that ended too early or never got off the ground.

This can be directly attributed to a series of policy errors from the Eurozone leadership, first and foremost the decision to create the euro. The resulting imbalance without a mechanism for fiscal transfers has meant that Germany has been able to dominate monetary policy and survive while the rest of the Eurozone suffered. Then, they provided poison for their common cold, when they forced debt-ridden countries to accept austerity measures in the aftermath of a recession. This destroyed economies and got them no closer to the desired debt to GDP ratio.

As a result, you have most European countries spiraling into a downturn before they recovered from the last recession, a fairly unprecedented event among Western democracies. You have to have a major run of bad luck or commit a real crime against your own economy. We’re in the midst of the latter.

The article makes it sound like European zombie banks and their unwillingness to lend are the major problem. That’s certainly part of it, and the slow process toward recapitalization has caused a number of problems. But shockingly, the word “austerity” doesn’t appear in the piece. We can keep this simple. Europe hit recession. The powers that be then decided to cut spending and fire a bunch of people. They went back into recession! You don’t really have to go much further than that.