Is the Greek financial crisis the canary in the mine shaft for the euro, and for further plans for European integration?
In one sense, the Greek case is unique. Its previous government lied to other European Union members about the true state of the country's finances, a practice other countries would be unlikely to try.
But aspects of the Greek disease are widespread throughout southern Europe and, in certain ways, in much of the EU.
As anyone who ever worked or travelled in Greece knows, a black market existed that was far removed from tax authorities. But variations on such a market, including avoiding income tax, exist in Italy, Spain and France. Avoiding tax in those countries, especially among the wealthy and the self-employed, was and remains a pastime.
Greece, too, had a public sector whose employees had pressured governments into working arrangements and salaries that could not be justified by their efficiency.
The difference, say, between Greece and France is that French public services work well (railways, telephones, post office, roads, airports, the health system) as any visitor to that country appreciates. But not all French services work all the time, as workers take industrial action should their benefits be threatened.
In Greece, as elsewhere, labour markets are exceptionally rigid. It is difficult there, as elsewhere, to lay people off, or rearrange work schedules. (Denmark arguably has Europe's most humane and flexible labour system.)
The euro, of course, put countries that lacked fiscal discipline on notice. They could not devalue their way out of trouble. They were supposed to adhere to a strict deficit-to-GDP ratio of no more than 3 per cent.
A country as profligate as Greece couldn't find that discipline. But then nor could other, larger countries, including France and for a time Germany, to say nothing of Italy. If the big countries that had driven the creation of the euro could not, or would not, abide by the discipline they had nominally imposed on themselves, then smaller countries asked: Why us?
The euro was the work of political elites who saw the economic benefits of one common currency, and the long-term goal of a deeper European union. It was always going to be a gamble that countries that adopted the currency would play by the established rules.
The Germans, in particular, did not like abandoning their beloved mark, a symbol of that country's strong economy and inflation-proof currency. But out of a sense of wanting to be good Europeans, and the sense that a more efficient Europe might be profitable for Germany, the Germans went along, provided the European central bank was in Frankfurt. But not before insisting on fiscal discipline in the original euro treaty.
Others agreed reluctantly for the same reason: to impose an external discipline they could not find themselves. No wonder the Germans are unhappy with the Greeks (and others) who took on the euro but not the discipline that was part of the package. Today, the Greek bailout from the EU (and the International Monetary Fund) is politically unpopular in Germany, for understandable reasons.
With countries moving at such different economic speeds, with such huge gaps in unemployment (Spain's unemployment just topped 20 per cent!), and with fiscal deficits so large, the pressure on the euro from within the union will remain intense.
The possibility, therefore, that the Greek disease could spread to Spain, Portugal, Ireland cannot be dismissed, if foreign bondholders turn thumbs down on the fiscal futures of those countries. Spain, for example, promises a return to a 3 per cent deficit-to-GDP ratio in three years, but that will require remarkable (and thus far unknown) political courage and very strong economic growth.
And then there is Britain, set to select a new government Thursday, likely a Conservative one, full of Euroskeptics, still convinced that Britain has some sort of special transatlantic destiny that might be compromised by more integration in Europe.
Whichever party wins (or parties, since a minority government is highly likely) will inherit a country with a staggering 11.6 per cent deficit-to-GDP ratio that will require tax increases and spending cuts beyond anything spoken about in the campaign.
Perhaps the Greek case is an extreme one, but almost every European country will feature governments of various political stripes forced to raise taxes and/or cut services, in the face of public reluctance to accept either or both.