What a week. While Britain lives one of the greatest political dramas in its postwar history, the continent is convulsed by an unprecedented crisis of the Eurozone. Here in Brussels, I keep flicking between the two, like someone trying to watch two cliffhanger Wimbledon tennis finals simultaneously.
They are different matches, but they have much in common. At stake, both on the island and the continent, is the future of a whole way of organizing the economy and society - sometimes called the "European social model" - combining the free play of markets with high levels of public spending, social security, quality of life (long holidays, sickness and maternity leave, early retirement) and, alas, mountainous debt. Also at stake is the way we organize Europe itself: the postwar "European project" of which, like it or not, Britain is a part.
Shortly after 9 a.m. on Monday, I heard Europe's two sleep-deprived presidents, Jose Manuel Barroso of the European Commission and Herman Van Rompuy of the European Council, triumphantly present to a World Economic Forum audience a "shock and awe" package to save the euro zone. "Any attempt to threaten the stability of the euro will fail," Barroso said.
We shall see. If I were a bond trader, I would not yet be convinced. To succeed, this deal requires three things: Greece making deep, painful structural reform, Germany being ready to pick up part of the tab and the whole Eurozone agreeing to tighter fiscal co-ordination and economic governance. That's three giant ifs.
German Chancellor Angela Merkel has just lost her majority in the upper house of the German parliament because of an election loss in North Rhine-Westphalia. Broadly speaking, the parties that did best in that German province - which, incidentally, has a larger population and bigger economy than Greece - were those that abstained on or voted against the Greek bailout. They also resist cutting back the German welfare state.
Nor is there any appetite in Germany for great leaps forward in European integration. Yet that is precisely what the presidents of Europe tell us is necessary to overcome this Eurozone crisis. "In the end, we cannot have a monetary union without an economic union," Mr. Barroso said. Mr. Van Rompuy went further: "We can't have a monetary union without some form of economic and - er - political union."
They have economic logic, if not political realism, on their side. This crisis was essentially foretold by the critics of the original design of monetary union in the 1990s. They said you cannot have a strong, durable monetary union without a fiscal union, allowing for effective fiscal discipline and compensatory budget transfers across the whole currency area, and without higher levels of labour mobility. But if the Germans, and others, were not willing to go that far at that time, then they are even less minded to do so today.
So now there are two $64,000 - or rather €64,000-billion - questions.
The first is whether the Eurozone can somehow muddle through to a necessary minimum of shared fiscal discipline and "economic governance," before the bond markets come back to drink more blood - and Greece ends up defaulting, or, more politely, "restructuring its debt," whether inside or finally outside the Eurozone.
That is not a question directly to Britain, but Britain's unprecedented new European-style coalition government cannot be untouched by it. Monday's bailout already tangentially involved Britain, inasmuch as it is a contributor to that €60-billion of the European Union budget against which the EU loan guarantee to Greece is secured.
Labour's Alistair Darling was here at the Economic and Financial Affairs Council table at which that decision was made and, as one of his last acts as finance minister, assented to it. When (if) Conservative George Osborne comes to his first Ecofin meeting next Tuesday as Britain's new finance minister, he will - if things go according to French commissioner Michel Barnier's current plan - be confronted with a very uncongenial directive constraining London's hedge funds. It's not directly related to the Eurozone bailout, but in European minds, this all gets mixed up together.
How the Liberal Democrats and the Conservatives, the most Europhile and the most Europhobe parties in British politics, can work out a shared approach to this convulsed Europe, God alone knows. Yet if Britain's biggest single market goes belly-up, you can forget any hope of a rapid economic recovery.
The second big question is whether debt- and deficit-laden European welfare states, including not just Greece, Italy, Portugal and Spain but also Britain, will be capable of rescuing their public finances and reforming their social-market economies. For it's now clearer than ever that the Britain that Gordon Brown bequeaths, with its high public spending and debt burden, is just a more free-market variant of that "European social model."
If that model is to be saved, then it has to be changed. The old, rusty gas guzzler must be converted into a new, leaner, meaner but also greener hybrid.
"Europe is Detroit," one businessman said. From Greece to Britain, from Spain to North Rhine-Westphalia, Europeans face a wrenching change in the way they work and live.
In the unavoidable new politics of austerity, the issue is whether this will be merely destructive austerity or also creative austerity. The challenge is a collective one, in the Eurozone, but also an individual one, to each European country. Britain now stands at this European starting line, in an unfamiliar blue and orange striped vest, with Spain, Greece, Germany and France lined up beside it. Ready, steady, go.
Timothy Garton Ash is a professor of European studies at Oxford University.Report Typo/Error
Follow us on Twitter: