Eurozone must mend its ways to stay in business
Even as the EU cavalry charged — or, rather, trotted — to the Greek rescue, the cannons were swivelling to a new target.
The cost of Portuguese government debt rose sharply on the markets, while that of Greece reached levels one thought had gone out with flared trousers.
We have a problem. It is not just a Greek problem either; as the German economics minister tried to explain to a furious German public. The European taxpayer, no more than the Irish or American one, cannot afford another banking crash.
This alarming fact was highlighted by the International Monetary Fund in its twice-yearly look at the global economy last week. Governments are borrowing vast amounts of money to contain the effects of the 2008 financial crash.
They are stretching their budget to the limit. A second financial crash, were it to occur, would more or less have to take its destructive course.
In normal circumstances, of course, the default of a small economy would not threaten the global financial order. Circumstances, however, could not be more abnormal. And Greece is a member of the euro.
It never should have been. The only entry requirement under the Maastricht Treaty that made much sense was that government debt should be less than 60% of economic output (GDP).
But the rules were ignored, and not for the last time in the euro's short history.
The difference that low debt levels made to Ireland is apparent in the current crisis. The IMF puts Ireland's net debt this year at 47% of GDP.
Believe it or not, that is one of the lowest figures in the EU.
Admittedly, we are catching up fast on most of the others. The problem for Greece is that, with net |debt already 120% of GDP, it is running out of |road.
If the bond market gunners really do open up on Portugal, perhaps it, too, could be saved from default by its euro partners and the IMF.
As, even more cheaply, could Ireland, should the need arise. The same would not be true of Spain, still less of Italy.
To avert the possibility of a euro crisis, which could lead to a global crisis, Europe needs to get this right, but it has got off to an awful start.
Because there is no strategy for running the monetary union, the Greek rescue cannot be explained to hostile German voters.
Having sown the seeds of an unstable euro 12 years ago, eurozone leaders are still making it up as they go along.
There is no intrinsic reason why one member country being unable to pay its debts should bring down the euro.
Building these risks into the cost of borrowing may be the best way of reducing the risks.
There has always been a suspicion that the creation of the euro was partly an attempt to escape the iron laws of the market (or evil depredations, depending on your point of view).
It does seem that financial markets have become excessively speculative, and something needs to be done about it.
But the idea that a single currency of 16 nations and 400 million people can be operated on the basis of regulation and political will is fantasy; even if the political will were there, which it is not.
It must be replaced with realism, or it risks simply being replaced, by heaven knows what.