THERE IS NO EUROPE:

So Much for the European Project (Doug Bandow, 7.7.10, American Spectator)

Expelling Athens from the Eurozone was another option. But the euro is a political as well as an economic institution. Warned German Chancellor Angela Merkel: "If the euro fails it's not just the currency that fails, but Europe and the idea of European unification."

So rather than hold irresponsible spendthrifts accountable and respect the no bailout provisions of EU treaties, the organization rushed to Greece's aid. But that has turned out to be merely the start rather than the end of the crisis.

A Greek economic crash merely has been postponed. Athens will likely have to restructure its debt at some point. With $420 billion in sovereign debt, a Greek default would be the largest such bust in history.

Even worse, other European nations with larger economies risk a debt collapse. University of Chicago economist John H. Cochrane bluntly predicts: "barring a fiscal and growth miracle, we will either see sovereign defaults (larger and more chaotic for having been postponed) or the ECB [European Central Bank] will have to print euros to buy worthless debt, leading to widespread inflation." Spain, Portugal, and Ireland appear to be at greatest risk.

Willem Buiter, the chief economic at Citigroup, recommends a 2 trillion Euro European Monetary Fund. But who would pay for it and any future bailouts in what the think tank Open Europe calls "a de facto debt union"? Europe's contingent obligations already are huge, with EU members facing massive bank and other write-offs growing out of the financial crash and recession. It's not clear the leading European states could tax and borrow enough to bail out their neighbors even if they felt inclined to do so.

And the inclination to do so is fast running out. Britain is not part of the Eurozone and resents having been handed part of the Greek bailout bill. The newly installed prime minister in Slovakia, Iveta Radicova, is threatening to renege on the deal. She asked: "Why should poor Slovakia pay for the richer Greece?"

Most important, Berlin can no longer be counted on. Since World War II the Germans have subsidized their economically weaker neighbors in order to assuage their war guilt. But the number of Germans ready to seek financial penance for the political crimes of their fathers is rapidly falling.