123975000

What's happening in Europe right now may not be as much fun as watching Ron Paul on Jon Stewart, but it's hard to avoid the conclusion that much of our fate now lies in their hands. The euro was always predicated on voluntary sovereign governments' compliance with strict rules on debt. Those rules were either openly broken, or secretly flaunted or allowed to drift. All of this could be kept afloat for a while with the lubricant of economic growth – but take that away, and watch the bad debts chase the bankrupt governments chase the banks in even the strongest economies, like Germany.

We are at that moment when either the EU unravels because there is no collective will to bail out Greece (and Portugal and Italy) affirmatively or the Germans decide that it is time to take serious charge of the continent again. Zachary Karabell makes the case for optimism here. But I'm afraid I can't see a path between – although I am relieved that Tory euro-skepticism kept Britain from strapping itself to the euro mast.

Ryan Avent sketches the choice ahead:

On the one hand, it's as clear as ever that the euro zone needs a massive, ambitious policy to avoid a catastrophic financial scenario. And on the other, it seems ever less likely that the euro zone's leaders can agree on such a policy and muster the domestic political support to ratify and implement it. If Europe simply can't do what it needs to do, that leaves the euro zone, and the world, facing a very dark economic reality.

That reality is a darkening, intensifying depression, caused ultimately by governments, banks and individuals putting short-term ease over long-term stability over the last decade or so. My bet, I'm afraid to say, is on the euro's collapse. Sometimes, the pressure on such a new and risky experiment becomes too much. And this recession may prove Thatcher right again. You can't have a single currency for long without a single government. Pretty soon, I suspect we'll have neither.

(Photo: German Chancellor Angela Merkel and Greek Prime Minister George Papandreou (4th from R) attend a convention of the Federation of German Industry (BDI), where Papandreou spoke in an appeal for more German investment in Greece, on September 27, 2011 in Berlin, Germany. By Sean Gallup/Getty Images.)