Plenty of excellent articles at Spiegel Online about the Eurozone’s problems as seen by intelligent Germans.

Such as this one which argues that far from bringing countries of the Eurozone towards economic convergence, the single currency has locked in profound problems of competitiveness and so is forcing them apart.

Or is Germany issuing half-baked ideas?

Meanwhile in the Telegraph Ambrose Evans-Pritchard gleefully points up the continuing disagreements on what to do:

Paris is watching nervously. As Le Monde put it last week, “behind the question of aid to Greece is a France-Germany match that pitches two conceptions of Europe against each other.” The game is not going well for ‘Les Bleus’. The whole point of the euro for the Quai D’Orsay was to lock Germany into economic fusion. Instead we have fission.

EU leaders may yet rustle up a rescue package that keeps the IMF at bay, but alliances are shifting fast. Even Italy has slipped into the pro-IMF camp, knowing that rescue costs can be shifted on to the US, Japan, Britain, Russia, China, and the Saudis, lessening the burden for Rome…

The problem is that any fund set up by other EU member states may just not be big enough or credible enough.

Fearing that such a move will be even more damaging if it fails, some EU capitals may think that bringing in the IMF is the least awful among many awful options.

However, as A E-P points out:

The IMF option has its limits too. The maximum ever lent by the Fund is 12 times quota, or €15bn for Greece, not enough to nurse the country through to June. The standard IMF cure of devaluation is blocked by euro membership. So Greece will have to sweat it out with a public debt spiralling to 135pc of GDP next year, stuck in slump with no exit route.

The deeper truth that few care to face is that under the current EMU structure Berlin will have to do for Greece and Club Med what it has done for East Germany, pay vast subsidies for decades. Events of the last week have made it clear that no such money will ever be forthcoming.

As has been written about the Horror of Compounding Stupidity:

It is a moral hazard disaster to expect people who have been relatively prudent to have to dig deep into their own pockets to help deal with greedy state-sponsored profligacy on this scale, the more so since the profligates tend to be in denial and snarl angrily when anyone tells them to cut back on their banal, unsustainable lifestyles.

Which is why wise Germany claims to be holding out against paying for foolish Greece’s fast escalating debt.

But if no bail-out, then what?

As Robert Lucas showed, "a government that is credible—that is, a government that makes itself understood and believed—can quickly end a major inflation without a big increase in unemployment. Government credibility will cause people to quickly adjust their expectations".

But the corollary of that is that wild and sustained government stupidity as we are seeing in so many places and policy areas can lead to people adjusting their expectations – and behaviour – in wild and persisting stupid directions:

The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else…