Any Eurozone failure would send shock waves around the globe, shifting the balance of geopolitical power and perhaps prompting a fundamental reassessment of what the world's future might look like.
EU sources told Reuters that officials of France and Germany, since the 1950s the driving forces of European integration, had held discussions on a two-speed Europe with a smaller, more tightly integrated euro zone and a looser outer circle.
Estimates of how likely the currency bloc is to break up, how damaging it might be and what might remain afterwards vary wildly. But with European leaders still struggling to find a credible response to the crisis, the prospect of one or more countries leaving — and effectively defaulting on their sovereign debt as they do so — is seen rising by the day.
Suddenly, pundits, policymakers and other observers are questioning one of their most fundamental assumptions — that an increasingly united Europe would be a key player in a newly multipolar world.
“You already have one of the great pillars of globalisation, the United States, entering a period of difficulty and looking inward,” said Thomas Barnett, US-based strategist. “Now one of the other pillars, Europe, looks about to implode.”
That, he said, could leave the continent’s powers — who only a handful of years ago made up much of the G7 group of largest economies — increasingly sidelined as China, India, Brazil and others rose.
At the very least, analysts say, the world may have to get used to a Europe that has lost much of its confidence and has much less appetite for international engagement.
Coming after so many meetings not just of European leaders but also the G20, it would also leave the reputation of existing global governance systems and a generation of political and economic elites in tatters. Some of the damage may already be largely irreversible.
“Even if by some magic the crisis were to be over tomorrow, the other strategic actors in the world are already beginning to revise their views of Europe,” said Thomas Kleine-Brokhoff, a strategy expert at the George Marshall Foundation of the US.
That raises interesting questions for other areas of the world, where many had often expected regional blocs would gradually in time form EU-like entities and move to closer integration.
“Europe was supposed to be the model for others to follow,” said Nikolas Gvosdev, professor at the US Naval War College. “That’s going to be questioned.”