BRUSSELS — 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.
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 too does the 27-nation European Union, a rousing diplomatic success that united a continent ripped apart by two World Wars.
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 percent, according to UBS forecasters. The financial and economic pain would spread west and east as the U.S. 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 U.S. 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 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.
The market doubt that is now engulfing Europe has brought home one hard lesson: It is impossible in the long term for a common currency to survive without common economic rules.
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.
Press reports have said German officials are proposing that the five eurozone countries who have the top AAA credit rating jointly issue bonds. But that proposal — which Germany subsequently denied putting forward — has drawn boos from the European Commission, the EU's executive arm.
Having the EU divided into euro-using and non-euro-using countries is bad enough, critics of the German plan argue. Further fragmenting the eurozone into strong countries and weak countries would benefit no one, they say.
Also high on the agenda Tuesday is much stronger central fiscal governance for those countries that use the euro — integration with enough teeth that authorities at European Union headquarters in Brussels could demand changes in national budgets and impose penalties on countries whose deficits were too big.
Ceding even a little control over national budgets involves ceding some national sovereignty — a tough sell to voters.
And the officials will hear a report from Klaus Regling, the head of the European Financial Stability Facility — the fund that is supposed to be a firewall against financial contagion, the frightening phenomenon of market doubt spreading from one country to another.
In October, the 27 European heads of government "decided" to increase the lending capacity of the fund, known as the EFSF, from €440 billion ($587 billion) to €1 trillion ($1.3 trillion) But that increase in firepower remains only a theoretical construct. Significant investors in the fund have not yet been found.
Meanwhile, the financial contagion seems almost impossible to check as it spreads from one country to the next. Greece is in dire trouble, then suddenly the markets have doubts about Italy, then even Germany is having trouble borrowing at the low interest rates to which it has become accustomed. Over one 24-hour period last week, the credit ratings for Hungary, Portugal and Belgium were all downgraded.
Privately, EU officials have told The Associated Press that the best Europe can hope for is a decade of slow growth and pain, with the euro holding together.
The worst? Breakup of the euro, with bank runs, recession and misery.