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Michael Collins is an investment commentator with Fidelity Worldwide Investment.

Italy is now run by 17 technocrats, loosely defined as anyone with relevant qualifications who isn't a career politician. That's the composition of the cabinet chosen by Prime Minister Mario Monti, an academic economist who, having served for 10 years with the European Commission, meets anyone's idea of a technocrat.

The rise of these largely unknown anti-politicians is, in essence, a coup by bond investors. After lending Italy's government enough money to equate to 120 per cent of the country's GDP, fixed-income investors demanded unsustainable yields (anything over 7 per cent for a lengthy period) to renew Italy's expiring debt.

The fact they engineered the removal of the discredited Silvio Berlusconi made possible the transition on 16 November to an emergency government with a cabinet comprising bankers, lawyers, civil servants, professors. The next elections are due in 2013.

Greece, which bond investors thought worthy of entrusting amounts totaling 160 per cent of GDP, has seen a similar putsch. Until elections in February, the most troubled of the eurozone countries is now led by a "government of national unity" under Lucas Papademos, another academic economist and a former deputy head of the European Central Bank.

On 11 November, Papademos replaced George Papandreou, who was ousted for daring to propose a referendum on whether Greeks would accept the austerity tied to rescue packages funded by the IMF [International Monetary Fund] and other EU [European Union] countries. The leaders of Germany and vulnerable France (its ratio of government debt to GDP is heading towards 90 per cent) torpedoed the proposal, which was really a vote on whether to keep the euro. Berlin and Paris were concerned the referendum would delay Greece's $180-billion rescue package announced in late October that was designed to ring fence the rest of the eurozone.

While Papandreou blew the politics of proposing a referendum (he didn't even tell senior colleagues of his idea), his administration elected in 2009 - as in it was not responsible for Greece's mess - was doing the will of Greece's creditors and rescuers against fierce domestic opposition. That is to say, he was imposing the endless austerity that has made Greece almost ungovernable (and the debt situation worse).

Bond investors seem happier that technocrats are running Greece and Italy and, no doubt, would push for the same result in Ireland, Portugal and Spain, where voters have engineered regime changes in recent elections. The majority of Greeks and Italians support these solutions for now, which highlights how mistrusted their politicians are.

It's understandable why investors and voters are fed up with democratically elected politicians. They are either imposing bad policy (such as the self-defeating policies of austerity) or shirking decisions like the US bipartisan debt "super committee" that failed to meet a November deadline to identify US$1.2 trillion in spending cuts over the next decade. (Bizarrely, the super committee was an attempt to skip the normal process of US congress and the president approving fiscal decisions.)

But Europe's technocratic governments may not match their promise. Technocrats have little credibility when it comes to the euro. And it's hard to see how these shadow governments will have the political skills to pacify their populations as they impose drastic solutions.

As technocratic governments by default base themselves in the centre of the political spectrum, their unpopular solutions will tend to boost parties on the extremes. They will only help to fuel the beliefs that the political elite are out to protect the financial elite and that the EU is rigged in favour of the continent's larger (core) powers such as Germany.

Boffin-led euro

It was the intelligentsia that drove the flawed creation of the euro in 1999 against the popular will and much expert advice. So it is ironic they are being asked to defuse the time bomb they laid.

The idea for a common currency was spawned after World War II out of an idealism that an economically and politically unified Europe would make for a peaceful, prosperous and powerful continent. The idea veered towards reality in 1989 when Germany committed to a single currency to gain France's support for reunification. This led to what is known as the Maastricht Treaty of 1992, when the EC's 12-member countries agreed to a single currency by 1999. Among other things, treaty signers accepted limits on government deficits (a 3 per cent cap) and public debt-to-GDP levels (a 60 per cent ceiling).

Elites found it challenging to get their people to agree to the various treaties surrounding financial and social union. They sometimes found it necessary to rerun and sometimes re-jig referendums to get voter ascent. They saw Swedish voters in 2003 reject joining the euro and Dutch and French voters in 2005 rebuff their proposed European constitution. Their usual resort was to fudge integration while avoiding polls.

The greatest shirk of all was that Europe's political class baulked at pushing for the political union needed to make any monetary union work. Europe needed to federate as Australia's states did in 1901 because this allows politically acceptable tax and payment transfers across the single currency zone to help challenged areas that, in joining a common currency, have foregone an independent monetary policy and an ability to depreciate their way back to competitiveness. The ruling classes knew European voters would reject that. But they pressed ahead in locking disparate economies into a currency union even though many informed critics warned that this flaw could sink the euro.

Another miscalculation of these technocrats was that they failed to build a mechanism for enforcing the agreed limits on government deficits and borrowings. As bond investors were overlooking these matters as they sought the extra yields on offer in southern Europe, technocrats and politicians across Europe ignored that some countries were flouting the rules or even falsifying accounts as Greece did. The other great flaw was relaxing bank controls and creating a central bank that was obsessed with inflation but distanced itself from any responsibility for Europe's financial system.

While today's euro crisis was, in essence, born of technocratic arrogance and complacence, it can't be undone without trauma. As a consequence, democracy is suspended in two member states so far to keep a common currency in place.