Eurozone finance ministers are streaming into Brussels on Tuesday in a desperate bid to
save the 17-nation euro currency - and to protect Europe, the United States, Asia and the rest of the global economy from a debt-induced financial tsunami.
OECD issues warning on global economy Most officials agree that, in the race to save the euro, there is no time to lose, but all of a sudden it seems there are more leaks in the dike than there are fingers.
And it's not just a currency used by 332 million people that is at stake. As German Chancellor Angela Merkel and others have said, if the euro fails, so does the 27-nation European Union, a rousing diplomatic success that united a continent ripped apart by two World Wars.
PERSPECTIVE: Stock Market bloodbath - Is worse yet to come? If the Euro fails, bank lending would freeze, stock markets would likely crash, and Europe's economies would crater. Nations in the eurozone could see their economic output fall temporarily by as much as 50 per cent, according to UBS forecasters. The financial and economic pain would spread west and east as the US and Asia get ensnared in the credit freeze and their exports to Europe collapse.
In all, it's a scenario far more dire than even the devastating 2008 credit crunch after the US mortgage debacle.
"If Europe is contracting, or if Europe is having difficulties, then it's much more difficult for us to
create good jobs here at home," President Barack Obama said on Monday as he met EU officials in Washington.
At the top of Tuesday's agenda is finding a means to integrate the eurozone's disparate nations - ranging from powerful Germany to tiny Malta - much more fully, both politically and financially. And the ministers must do it fast, without the delays caused by democratic niceties like time-consuming referendums.
Britons fear they are heading towards another recession The 17 eurozone finance ministers will discuss jointly issuing so-called eurobonds - an all-for-one, one-for-all way of having the different countries guarantee each others' debts. Right now, each nation issues its own bonds, and each must pay wildly differing borrowing rates.
Three small EU nations - Greece, Portugal and Ireland - are surviving only on bailouts, already shut out of international bond markets.
Two large debt-strapped eurozone nations - Italy and Spain - are roaring closer to being shut out of bond markets as well, but their economies are too large for Europe to bail out.
Having stronger countries like Germany stand behind the general European debt would in theory prevent weaker countries like Italy from having to pay higher and higher borrowing rates - and perhaps avoid a debt spiral that leads to a national bankruptcy.
But it would also almost certainly increase Germany's very low cost of borrowing - and for that reason Germany has been fiercely resisting the eurobond proposal.
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