There is a famous, if infamously foulmouthed, rant in Irvine Welsh 's Trainspotting. Renton bemoans the fact that Scotland "can't even pick a decent, vibrant, healthy culture to be colonised by. No. We're ruled by effete arseholes. What does that make us?"

I must confess that this speech came to mind last week watching our rulers thrash around in the Cypriot crisis like drunken rhinos. It’s one thing to be told what to do by a cold, calculating managerial elite but quite another to be subjected to the will of fools. Last week, we had our Wizard of Oz moment – the Mighty Troika revealed itself to be just another bunch of hapless incompetents.

There’s an unspoken narrative behind contemporary events in the euro zone and it is the tale of the Three Little Pigs. The southern and (in our case) western pigs built their euro zone houses of straw and sticks and they were blown down by the big bad wolf of financial crisis. The northern pigs built their house of sturdy, Protestant, Teutonic brick, stern and strong enough to withstand the huffing and puffing. Out of the goodness of their hearts, they have allowed the silly southern pigs to shelter under their steadfast roof. It is only right that the foolish pigs should, in return, do as the wise ones tell them.

This is, of course, a fairy story. It leaves out some rather relevant facts, like the reality that the fatally flawed architecture of the euro zone was above all a German design. And that the reckless, greed-fuelled lending by German banks is the other side of the reckless borrowing by the “bad” countries. It deploys stereotypes that border on the racist to occlude, for example, the fact that the “lazy” Greeks work far harder than the “hard-working” Germans.

It plays up the reasonable concerns that Cypriot banks have been involved in money laundering while playing down the massive scale of money laundering by respectable northern Europe an banks. (Even Germany 's most venerable financial institution, Deutsche Bank, is the subject of a major investigation into money laundering and tax evasion.)

But this fairy story has dramatic consequences – not least the setting aside of democracy for the foolish pigs, deemed to be too foolish to be allowed to make decisions for themselves. Our role is to be humble and grateful and to do what the wise ones tell us. The assumption is that, even we don’t like the prescription, the medicine is scientifically formulated.

Two things happened last week in Cyprus, however. One is that the wise ones tried to do something breathtakingly stupid: destroy basic confidence in European banks by tearing up guarantees on deposits of up to €100,000. The other is that this idiocy was stopped by angry citizens.

It is important to grasp that the stupidity of the proposal to raid guaranteed deposits is not an aberration. It is an inevitability. Why? Because unaccountable institutions with too much power always make bad decisions. That’s why we have democracy – making institutions accountable isn’t just a nice principle. It’s the only way to limit the inherent stupidity of power. And the real crisis we have at the moment is that, in the handling of the euro zone debacle, democracy has been suspended.

This is happening on two levels. Firstly, let's ask a simple question: what, in Ireland, Portugal, Spain, Italy, Greece and Cyprus, is the most important political institution? The answer is obvious: the Troika. And then some other questions: what is the constitution of this body? Who elects its leaders? Under what set of laws does it operate? Above all, who holds it accountable? To whom does it answer? No one – not national parliaments, not the European Parliament. It is an ad hoc institution with immense power and no accountability. Everything we know from history tells us that such an institution will do very stupid things.

The other level at which democracy is in suspension is that of the nation state. Across southern Europe (and for these purposes that includes Ireland), we have a McDonalds model of democracy. There is a Troika franchising operation. The menu on offer is predetermined. The franchisee can make some small local changes (a tweak to the décor, a different badge for the employee of the month) but go too far and you lose the franchise. Customer choice must be as wide as, say, the difference between Fine Gael and Fianna Fáil.

All of this is being done in the name of efficiency, of hard-headed crisis management. It might make some kind of sense as a very short-term response to an immediate panic. But it is surely clear by now that the crisis is not short-term. It is deep and systemic and it will be with us for at least another decade. And in this context, the combination of unaccountable power and McDonalds democracy is neither hard-headed nor efficient. We have democracies because we are supposed to believe that engaging people in decision-making makes for better decisions. We certainly know that unaccountable elites who think they know what’s good for us will do stupid things. We live with the proof of that hard-won insight every day.