Cyprus may have been saved from disaster, but don't be fooled: Europe is still a hot mess.

In the middle of the night on the continent, officials managed to hastily stitch together a plan to rescue Cyprus and keep it from leaving the eurozone. The deal came just hours before a European Central Bank deadline that could have left Cyprus cut off from short-term capital, beginning the potential unraveling of the entire currency union. It also came just about one week after another hastily stitched-together bailout deal sparked outrage in Cyprus and around the region and created the need for desperate last-minute talks in the first place.

To paraphrase Winston Churchill, European policymakers always do the right thing, but only after exhausting every available alternative. As Quartz's Simone Foxman points out, this is no way to run a currency union, which together makes up the world's second-largest economy. And there are reasons to suspect this won't be the last bungled bailout.

The Cyprus debacle came about in part because the European Commission and the International Monetary Fund weren't on the same page about what to do with Cyprus from the start, the Financial Times reports -- an echo of their disagreements over helping Greece last year. This incident has left their relationship more fraught than ever, and it means we could very well get a repeat of the botched Cyprus bailout soon -- in Slovenia, or Italy, or who knows where else.

"The troika model has become dysfunctional," a European official told the FT, referring to the trio of the European Union, IMF and European Central Bank. This troika has been responsible for bailing out countries throughout the crisis. This is the wrong moment for it to break down.

Also further breaking down are relations between northern European nations, led by Germany, and economically troubled southern Europe, represented by Greece, Italy, Spain, Cyprus, et cetera. Suffering from bailout fatigue, northern countries took a harder line than usual with Cyprus -- an ominous sign for the next crisis.

Europe even managed to annoy Russia, by failing to include it in talks over Cyprus, even though wealthy Russian depositors in Cypriot banks were going to be shellacked in any deal. Annoying Russia almost never ends well.

"We suspect that the same regime that locks up a punk rock band for criticizing it, will find a way to express its dissatisfaction with the EU and Germany," Brown Brothers Harriman currency strategists wrote in a note Monday morning.

Also burned by this debacle: Small depositors in banks throughout Europe, who have to be thinking twice about what to do with their money. European policymakers can claim that their initial effort to shove small Cypriot depositors under the bus was a special one-off circumstance, but the principle of Thou Shalt Not Shove Small Depositors Under The Bus, sacrosanct throughout the developed world, was nearly violated. People don't tend to forget that sort of thing.

Europe still needs a banking union with inviolable depositor protection and procedures in place for winding down failing institutions. Banks the size of the troubled banks in Cyprus failed almost every week in the U.S. after the crisis without causing a ripple, thanks to the Federal Deposit Insurance Corporation. Europe needs its own version of the FDIC, but that is still a distant dream.

Europe also needs a fiscal union, where the stronger economies help out the weaker economies as a matter of course, and crisis decision-making does not involve a troika of government bodies parachuting in at the last minute every time. Europe today is often compared to the United States when it was knit together by the Articles of Confederation. The U.S. wouldn't have survived that model, and Europe's union can't survive in its current form. Sorting out a permanent solution was always going to be difficult. It is going to be a lot harder when everybody's angry with each other.

Financial markets will cheer the Cyprus deal Monday morning and in the days ahead, and with good reason: Disaster has been averted once again. But Europe will be back to frighten them again. The next crisis may not be solved so cleanly.

Update: In fact, the relief of financial markets lasted scant hours before things started to come unraveled again. European and U.S. stocks have been worsening all morning. The Dow Jones Industrial Average was recently down about 70 points, and the Euro STOXX 50 index was down about 0.7 percent.

The selloff was sparked by some alarming statements this morning: Dutch Finance Minister Jeroen Dijsselbloem, the leader of the Eurogroup finance ministers, brilliantly suggested Cyprus's bailout deal could be a "template" for future deals, leading everybody to freak out about the idea of depositors and creditors taking brutal haircuts in the future. Then a Cypriot lawmaker suggested Cyprus could still leave the euro zone. Rating agency Moody's warned that, given the dismal state of Cyprus' economy, an exit from the euro zone was still a strong possibility. Others suggested that, with recently imposed capital controls, Cyprus had all but left the euro zone already anyway.

So, yes, though the immediate crisis has once again been averted, little has been solved.

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  • Cypriots show their palms reading 'No' during a protest against an EU bailout deal outside the parliament in Nicosia on March 18, 2013. Cyprus's parliament has postponed until March 19 a session to vote on the bailout deal that slaps a levy on all Cypriot bank savings, as negotiators scrambled to soften the blow for small deposit holders. AFP PHOTO/PATRICK BAZ (Photo credit should read PATRICK BAZ/AFP/Getty Images)

  • Cypriots protest outside the parliament building in Nicosia, on March 18, 2013. Cyprus President Nicos Anastasiades was seeking the backing of MPs for an EU bailout deal that slaps a levy on bank savings under harsh terms that have jolted global markets and raised fears of a new eurozone debt crisis. AFP PHOTO /PATRICK BAZ (Photo credit should read PATRICK BAZ/AFP/Getty Images)

  • Euro coins from Cyprus, center, surrounded by coins from other Euro zone countries, are displayed in a coin collectors' shop window in downtown Lisbon, Tuesday, March 19, 2013. The Cypriot government sought Tuesday to shield small savers from a plan that is intended to raise euro 5.8 billion ($7.5 billion) toward a financial bailout by seizing money from bank accounts. The plan, which is part of a larger bailout package being negotiated with other European countries, has been met with fury in Cyprus and has sent jitters across financial markets. (AP Photo/Francisco Seco)

  • A Cypriot man wearing a mask of Greek Prime Minister Antonis Samaras smokes a cigarette during a protest against an EU bailout deal outside the parliament in Nicosia on March 18, 2013. Cyprus's parliament has postponed until March 19 a session to vote on the bailout deal that slaps a levy on all Cypriot bank savings, as negotiators scrambled to soften the blow for small deposit holders. AFP PHOTO/PATRICK BAZ (Photo credit should read PATRICK BAZ/AFP/Getty Images)

  • Cypriots holding cut-out masks of German Chancellor Angela Merkel (top-R), European Commission head Jose Manuel Barroso (C) and Cypriot President Nicos Anastasiades (top-L) take part in a protest against an EU bailout deal outside the parliament in Nicosia on March 18, 2013. Cyprus's parliament has postponed until March 19 a session to vote on the bailout deal that slaps a levy on all Cypriot bank savings, as negotiators scrambled to soften the blow for small deposit holders. AFP PHOTO/PATRICK BAZ (Photo credit should read PATRICK BAZ/AFP/Getty Images)

  • A Cypriot woman wearing a mask of German Chancellor Angela Merkel stands next to a fellow demonstrator wearing a mask of Cypriot President Nicos Anastasiades during a protest against an EU bailout deal outside the parliament in Nicosia on March 18, 2013. Cyprus's parliament has postponed until March 19 a session to vote on the bailout deal that slaps a levy on all Cypriot bank savings, as negotiators scrambled to soften the blow for small deposit holders. AFP PHOTO/PATRICK BAZ (Photo credit should read PATRICK BAZ/AFP/Getty Images)

  • Protesters shout slogans during a protest outside of the parliament in Nicosia, Cyprus, Monday, March 18, 2013. A vote on a bailout package for Cyprus that includes an immediate tax on all savings accounts has been postponed until Tuesday evening. Yiannakis Omirou, the speaker of Parliament, said the delay was needed to give the government time to amend the deal reached over the weekend that prompted an outcry from those who thought their money was safe. In order to get euro 10 billion ($13 billion) in bailout loans from international creditors, Cyprus agreed to take a percentage of all deposits — including ordinary citizens' savings — an unprecedented step in Europe's 3 ½-year debt crisis. (AP Photo/Petros Karadjias)

  • A protestor with a mask of German Chancellor Angela Merkel shout slogans during a protest outside of the parliament in capital Nicosia, Cyprus, Monday, March 18, 2013. A vote on a bailout package for Cyprus that includes an immediate tax on all savings accounts has been postponed until Tuesday evening. Yiannakis Omirou, the speaker of Parliament, said the delay was needed to give the government time to amend the deal reached over the weekend that prompted an outcry from those who thought their money was safe. In order to get euro 10 billion ($13 billion) in bailout loans from international creditors, Cyprus agreed to take a percentage of all deposits — including ordinary citizens' savings — an unprecedented step in Europe's over 3 year debt crisis. (AP Photo/Petros Karadjias)

  • A Cypriot couple hang placards from their necks during a protest against an EU bailout deal outside the parliament in the capital, Nicosia, on March 19, 2013. The party of Cyprus' President Nicos Anastasiades will abstain from taking part in a parliamentary vote on an EU bailout, that slaps a levy on all Cypriot bank savings, a party member said. The banner on the right reads in Greek: 'It's capitalism idiots!' AFP PHOTO/PATRICK BAZ (Photo credit should read PATRICK BAZ/AFP/Getty Images)

  • Two man pass by the people using the ATM machines outside of a Laiki Bank branch in capital Nicosia, Cyprus, Sunday, March 17, 2013. Cyprus parliament had postponed the debate and vote on the controversial levy on all bank deposits that the cash-strapped countrys creditors demanded in exchange for euro10 billion (US$13 billion) in rescue money, officials said. (AP Photo/Petros Karadjias)

  • A man sits and drink as women use the ATM machine outside of a Bank of Cyprus branch in capital Nicosia, Cyprus, Sunday, March 17, 2013. Cyprus parliament had postponed the debate and vote on the controversial levy on all bank deposits that the cash-strapped countrys creditors demanded in exchange for euro10 billion (US$13 billion) in rescue money, officials said. (AP Photo/Petros Karadjias)

  • A police officer stands by a protest banner outside of parliament before a meeting in capital Nicosia, Cyprus, Monday, March 18, 2013. Cyprus' president is briefing lawmakers ahead of a crucial parliamentary vote on a controversial levy on bank deposits that the cash-strapped country's creditors have demanded in exchange for a euro10 billion (US$13 billion) rescue package.(AP Photo/Petros Karadjias)

  • Children are seen by a protest banner held by protestors outside of the parliament during a crucial meeting in capital Nicosia, Cyprus, Monday, March 18, 2013. Cyprus' president is briefing lawmakers ahead of a crucial parliamentary vote on a controversial levy on bank deposits that the cash-strapped country's creditors have demanded in exchange for a euro10 billion (US$13 billion) rescue package.(AP Photo/Petros Karadjias)

  • A protestor shout slogans outside of parliament during a meeting in capital Nicosia, Cyprus, Monday, March 18, 2013. Cyprus' president is briefing lawmakers ahead of a crucial parliamentary vote on a controversial levy on bank deposits that the cash-strapped country's creditors have demanded in exchange for a euro10 billion (US$13 billion) rescue package.(AP Photo/Petros Karadjias)

  • A protestor with his child hold a banner outside of parliament during a crucial meeting in capital Nicosia, Cyprus, Monday, March 18, 2013. Cyprus' president is briefing lawmakers ahead of a crucial parliamentary vote on a controversial levy on bank deposits that the cash-strapped country's creditors have demanded in exchange for a euro10 billion (US$13 billion) rescue package.(AP Photo/Petros Karadjias)

  • A view of the Bank of Cyprus UK in Charlotte Street, central London, Monday, March 18, 2013. The euro 10 billion (US dlrs13 billion) Cyprus bailout agreed by the EU and IMF demands that all bank customers pay a one-off levy on all bank deposits, to save the country from bankruptcy. Cyprus' president Nicos Anastasiades urged lawmakers to approve the tax when they vote Monday, saying he wants to amend the unpopular eurozone bailout plan to reduce its effect on small savers. (AP Photo / Nick Ansell, PA) UNITED KINGDOM OUT - NO SALES - NO ARCHIVES

  • A man uses an ATM at a bank, right, in Pamplona northern Spain on Monday, March 18, 2013. A plan to tax depositors in Cypriot banks as a way to partly fund a bailout of the Mediterranean island nation impacted on the euro-zone Monday, as officials in Spain and Italy tried over the weekend to reassure their citizens by saying the situation in Cyprus is unique, and that bank deposits in their countries will remain safe. (AP Photo/Alvaro Barrientos)

  • Protesters hold up their hands as they protest outside the parliament in capital Nicosia, Cyprus, Monday, March 18, 2013. A vote on a bailout package for Cyprus that includes an immediate tax on all savings accounts has been postponed until Tuesday evening. Yiannakis Omirou, the speaker of Parliament, said the delay was needed to give the government time to amend the deal reached over the weekend that prompted an outcry from those who thought their money was safe. In order to get euro 10 billion ($13 billion) in bailout loans from international creditors, Cyprus agreed to take a percentage of all deposits — including ordinary citizens' savings — an unprecedented step in Europe's 3 ½-year debt crisis. (AP Photo/Petros Karadjias)

  • Cypriots hold placards during a protest against an EU bailout deal outside the parliament in Nicosia on March 19, 2013. The party of Cyprus' President Nicos Anastasiades will abstain from taking part in a parliamentary vote on an EU bailout, that slaps a levy on all Cypriot bank savings, a party member said. AFP PHOTO/PATRICK BAZ (Photo credit should read PATRICK BAZ/AFP/Getty Images)

  • A man use his mobile phone as he passes outside of the a Russian commercial bank in capital Nicosia, Cyprus, Tuesday, March 19, 2013. A high proportion of deposits in Cypriot banks are believed to be held by Russians and Cypriot Finance Minister Michalis Sarris is flying to Moscow Tuesday to meet with his Russian counterpart. Financial markets are reported to be tense Tuesday as investors await a vote in Cyprus on a contentious plan to help fund the country's bailout by a one off charge on bank deposits although there may be a change to the proposed levy to spare small account holders. (AP Photo/Petros Karadjias)

  • Cypriots use the ATM machines outside of a closed Laiki Bank branch in capital Nicosia, Cyprus, Tuesday, March 19, 2013. Cypriot finance officials are revising a planned financial bailout to relieve small account holders from having to pay a charge on their savings in order to secure an international rescue of the country's troubled banks.(AP Photo/Petros Giannakouris)

  • A Cypriot man asks for help from a member of bank stuff to get money from an ATM machine outside a closed Laiki Bank branch in capital Nicosia, Cyprus, Tuesday, March 19, 2013. Cypriot finance officials are revising a planned financial bailout to relieve small account holders from having to pay a charge on their savings in order to secure an international rescue of the country's troubled banks.(AP Photo/Petros Giannakouris)

  • Pensioner Adreas Tartis 74 years old sits on chair in central Nicosia, Cyprus, Tuesday, March 19, 2013. Tartis said that the situation of Cyprus is difficult. Cypriot finance officials are revising a planned financial bailout to relieve small account holders from having to pay a charge on their savings in order to secure an international rescue of the country's troubled banks.(AP Photo/Petros Giannakouris)

  • An employee of the Stock Exchange walks next to a display showing stock price movements in Athens, Tuesday, March 19, 2013. Banks stocks were sharply lower on the Athens Stock Exchange, as trading resumed for the first time in Greece since the details of a bailout in Cyprus and a shock levy on bank deposits were announced. Trading in the shares of Bank of Cyprus and Laiki was suspended for two days on the Athens Stock Exchange. (AP Photo/Thanassis Stavrakis)

  • A man passes outside of the a Russian commercial bank in capital Nicosia, Cyprus, Tuesday, March 19, 2013. A high proportion of deposits in Cypriot banks are believed to be held by Russians and Cypriot Finance Minister Michalis Sarris is flying to Moscow Tuesday to meet with his Russian counterpart. Financial markets are reported to be tense Tuesday as investors await a vote in Cyprus on a contentious plan to help fund the country's bailout by a one off charge on bank deposits although there may be a change to the proposed levy to spare small account holders. (AP Photo/Petros Karadjias)