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Is Europe really on the brink?

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In 2007, talk of breakup, of bond markets "factoring in" possible departures from the eurozone, or of a Europe of the north and a Europe of the south, would have seemed absurd. Europe was cash rich, with banks lending at 1 percent.

Remember, too, that a decade ago, intellectuals on both sides of the Atlantic routinely described Europe – with a population of 500 million and a gross domestic product of $16 trillion – as "the future." American economic guru Jeremy Rifkin outlined a "European Dream" in which cherished values of justice would merge with social equity. Charles Kupchan of the Council on Foreign Relations predicted an inexorably integrating Europe as a global counterweight to the US. With America mired in a global war on terrorism, British author Mark Leonard wrote convincingly about the "Ascent of Europe."

(In an interview in London, Mr. Leonard, cofounder and director of the European Council on Foreign Relations, now argues that Europe's unwillingness to face the crisis head-on means "the best-case scenario is a lost decade.")

Perhaps, from an American perspective, the most striking and baffling aspect is this: Theoretically, Europe's crisis could be solved in five minutes, with a change of heart in Berlin and Brussels.

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