Secession is the only real hope. Maintain the free trade and common labor market, but get rid of the Euro and leave the political sphere. Losing your sovereignty to a national government is bad, but getting it lost to a multi-national government is even worse.
The problem with this is that democracy is just a way to make group decisions. This notion of direct democracy could apply to a family which decides all matters by vote (I do not advocate this), or a worker owned production facility (industrial or agricultural) that makes and approves its plans by vote...