“Of course it will survive. Europe is a fairly small geographic area with a large number of diverse cultures and countries. In the past, that has created everything from military conflict to virulent ideologies to trade competition with tariffs. The European Union is an emblem of getting over that, and I don’t think Europeans are going to walk away from it. But what it’s going to take for the EU to survive, that’s what’s being hashed out in practice.
“The EU created a single currency, which means one monetary policy for the entire eurozone, the 17 EU–member nations that have officially adopted the euro. But within that there are still 17 individual national fiscal policies, sound and unsound, and in the end those countries that are solvent, such as Germany, are going to be tired of bailing out those that are not solvent, such as Greece. So either you impose more central control over fiscal policies as well, or you loosen up and find ways to allow countries to be different.
“If I had to predict, there is going to be a writing down of debt in the weakest economies—for example, creditors to Greece might get a fraction of a dollar back rather than a whole dollar—and a Europeanization of that debt, so it’s no longer to be paid back only by Greece but by the EU as a whole. In exchange for that commitment to absorb the debts of others, you might see some countries stay in the EU but go back to their national currencies, or even the creation of two euros—one for the weaker economies and one for the stronger.”
Kurt Volker, former U.S. ambassador to NATO, is managing director and senior fellow of the Center for Transatlantic Relations at the Nitze School of Advanced International Studies.