If eurozone politicians don't follow through fast with stiff new rules, the answer is yes - By Daniela Weingärtner

The people of the eurozone's 11 founding countries did not exactly welcome their new currency with ticker-tape parades. When the euro was introduced in 1999, most people were thoroughly skeptical. Then, for 11 years, the common currency became a star, a poster child for a Europe without borders, where living standards would someday differ as little as the designs on the coin's reverse side. The euro gave Europe a new vision alongside its somewhat faded image as the world's greatest peace project: that of a prosperous economic zone that would lift all boats with its growth. That was the new European dream.

Within the space of five months, that dream has given way to a nightmare. Germany, Austria, Finland, Luxembourg and the Netherlands - the countries with still halfway solid finances, increasingly see themselves as the eurozone's cash cows. The German people's years of lamenting their net contributor status were harmless chitchat compared to the rage that thrifty Germans now feel toward their southern European neighbors. Even well-informed and open-minded young Germans suddenly realize that they've long wondered how their Spanish and Greek friends could pay for their nonstop party.  

The lawsuit brought by law professor Karl Albrecht Schacht­schneider and economist Wilhelm Hankel before the German Constitutional Court against the rescue package for Greece fits well into this political climate. Hankel demonstrates the math compellingly: that the common currency may have allowed Germany to increase its exports within the EU but the country has paid for it with wage restraints. The rescue package actually bails out the creditor banks to the detriment of the German taxpayer, he says, adding that not even the Greeks are helped much because the tough austerity measures they face will inevitably drive their country into recession.

Hankel argues that the euro has a birth defect that urgently needs correcting. Along with French Finance Minister Christine Lagarde, he sees unbridgeable competition gaps within the eurozone. Lagarde says the answer would be to raise German wages. Berlin, meanwhile, wants to banish the problem by imposing more budgetary discipline on other states. Hankel advocates a radical solution: dissolving the eurozone. Currency unions never worked in the past, he argues. Whether the gold standard, Bretton Woods or the Nordic Currency Union, they all failed. The euro, too, is nothing more than an aberration of history, Hankel says.

On one point Hankel is right. From its inception, the EU was a transfer union that sought to lift peripheral members like Greece and Portugal gradually out of poverty. Yet the alms of the rich Central Europeans flowed through the canals of a strictly capped EU budget that was last set at just over one percent of annual economic output - hardly more than some member states development aid budgets.

In 2008, Germany paid in ?8.8 billion more than it reaped in agricultural and other subsidies. Figures for 2009 have yet to be compiled. Now, to help Greece, ?22 billion in German credits are needed all at once. If the plan fails, the money is gone. The rescue fund envisaged for the coming three years for other potential bankruptcy candidates could - in the worst case - cost Germany an additional ?148 billion, equaling 20 years of transfer payments to the EU.   

The German government forced the credit guarantees through the Bundestag in the startlingly short time - one week. Only in Portugal, the Netherlands and Austria did the parliaments approve the package faster. The point was most likely to establish facts before a new euro-debate like the one in Germany over the aid for Greece could gather momentum.

One thing is certain. The people of the paymaster nations will tolerate the rescue actions over the longer term only if they see that Brussels draws clear lessons from the whole disaster. The market, too, will not calm down before the eurozone's states finally set new rules for themselves.

Yet this is precisely what is not happening. A so-called task force of finance ministers, European Central Bank president and the European monetary affairs commissioner met for the first time on May 21 with European Council President Herman van Rompuy. It produced nothing more than a content-free list of "objectives."

There are several reasons for this lack of progress. Eleven of the EU's 27 states are affected only peripherally by the crisis because they still have their own currencies. In London, the EU's biggest banking center, a new government has entered office that needs to avoid at all costs any appearance of European economic federalism. That's one explanation for why the European Commission is reluctant to propose clear financial market regulations. Internal Market Commissioner Michel Barnier's vague proposals for a Europe-wide bank levy implemented by national governments are just the latest example. The eurozone states are shrinking from laying down new rules of their own, which would cement a two-speed Europe. Conversely, some eurozone members are working to prevent a real economic regime by using the antagonisms of the greater EU framework as a pretext to keep the changes cosmetic. These countries definitely include Germany and probably France as well.

No one can yet imagine that the eurozone could fall apart or shrivel to its core of five net contributors. It is first of all a political project, not an economic one.

François Mitterrand and Helmut Kohl made a deal that Germany would swap the solid German mark for the right to integrate 18 million East Germans into the Federal Republic, thereby becoming the EU's most populous and powerful state. This is why a collapse of the eurozone and the reintroduction of the German mark would signal the demise of the European Union. That aspect is conveniently forgotten in the German debate over the euro's crisis.

The only path still open is through a stiff new Stability Pact, close monitoring of proposed national budgets before they are passed and a vehicle for use during crises that includes a limited amount of euro bonds and bancuptcy proceedings for insolvent members. All these re­commendations are currently on the tables of the 27 EU states. That is not where they belong. They must be approved within the framework of the eurozone, and fast. If the current crisis cannot effect these changes, the euro's days are numbered.