The implosion of the euro is no longer a bizarre fantasy of Britain's euroskeptics. It is now a constant of speculation on the trading floors of New York and Hong Kong, let alone London.

"Can the Euro still be Saved?" asks Germany's Der Spiegel. "Is the eurozone threatened with collapse?" asks France's Le Monde. Financial Times columnists suggest that Germany will pull the plug on the euro experiment it is no longer prepared to bankroll.

Or as Germany's CESIfo Institute, a Munich think tank that publishes the most closely watched indicator on German business confidence, puts it, "A regime in which Germany is obliged to pay for other countries' debts would endanger not just the euro but European integration as a whole."

Richard Youngs, who runs the Madrid FRIDE think tank, focuses his "Europe's Decline and Fall" (Profile Books) on the failure of the European Union to play much of a role on the world. But he is quick to stress that the internal and external fates of the European project are intertwined.

"The lack of any coherent international identity for Europe will over time weaken Europe's internal bonds," he told this reporter in an interview last week.

"A new world order is forming and for its own sake and to defend its own interests Europe needs to have a seat at the table to help set the new international agenda, which means Europe has to know what it stands for and what it wants," he said.

He said that the EU will survive, citing "the institutional reflex" that has developed since the European Economic Community was launched with the treaty of Rome more than 50 years ago. But whether that survival will be meaningful, whether the grand project of European social and economic and political integration will continue, is the real question.

"The turmoil associated with efforts to save the euro has brought to the surface the underlying magnitude of Europe's impending decline," argues Youngs in his provocative new book. The euro crisis, he claims, "seems to have cracked the very pillars of solidarity underpinning the EU."

And if the euro cannot hold, then the survival of the EU itself s an institution comes into questions. Again as Youngs writes, "European governments are scrambling to prevent the whole EU project collapsing."

One key issue for Youngs is the role of Germany. The dominant European economy, Germany has long been Europe's linchpin and guarantor. This was a price it was prepared to pay in the Cold War years when it was still divided and when the country had made the choice to reject Hitler's disastrous effort to forge a German Europe by force, and to seek an alternative identity in a Europeanized Germany.

But that idealism has died. What Jurgen Habermas, Germany's most prominent philosopher, calls "the new German intransigence" has been on uncomfortable display in the euro crisis. This spring, the Greek crisis was allowed to fester while Chancellor Angela Merkel refused any kind of bailout pending the outcome of a regional election on North Rhine-Westphalia. She lost, anyway.

This month, Merkel triggered the Irish crisis by asserting, whatever the eurozone guarantees to support its members' debts, that private bondholders must be prepared to take losses.

"Conscious of the diminishing room for political maneuver, these people shy away from farsighted goals and constructive political projects, let alone an undertaking like European unification," mourns Habermas in his essay "A Shared European Destiny." "The solipsistic and normatively depleted mindset of this self-absorbed colossus in the middle of Europe can no longer even guarantee that the unstable status quo in the EU will be preserved."

In a way, the eurozone crisis was made in Germany. Having spent 10 years holding down its wages to make its industry and its exports more competitive, Germany has built up massive trade surpluses. Just as China's cumulative trade surpluses have thrown the United States into crisis, so Germany's surpluses have done the same to its European partners, forcing them into chronic current account deficits.

And just like China, Germany has refused to spur more domestic consumption to ease its partners' plight. As Youngs puts it in his new book: "Germany claimed it would refuse point blank to contemplate a form of economic governance that would oblige it to stimulate demand in the name of assisting southern European countries."

Or in the words of Habermas, "The eurozone countries are heading toward a situation in which they will have to choose between a deepening of European cooperation and relinquishing the euro."

Or as the question was posed in last week's front-page headline Germany's top-selling daily Bild-Zeiting, "First the Greeks, then the Irish, then … will we end up having to pay for everyone in Europe?"

The problem is that this is a choice that Germany's government seems determined to avoid, fearful that either way spells political suicide.

"With a little political backbone, the crisis of the single currency can bring about what some once hoped for from a common European foreign policy, namely promoting a cross-border awareness of a shared European destiny," Habermas argued this year.

But he wrote in the dated rhetoric of a vanished era of German humility and idealism. Today's Europe no longer thinks in such terms. Instead, Youngs in his book quotes the Spanish diplomat Fidel Sendagorta who depicts Europe's shrunken vision -- if the EU survives -- as "A Greater Switzerland, downgrading our ambitions and using our energies to navigate our decline as safely as possible."

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