Who rules Europe? A couple of weeks ago there would have been one answer to the question: the German chancellor, Angela Merkel, not because of any great charisma, but for the simple reason that her country is Europe's dominant economy, with its export industries flourishing while other countries sink into a morass of rising unemployment. She is Europe's money-bags.
These days Mrs Merkel still dominates the debate on how to rescue the old continent from its debt-fuelled binge of living beyond its means. Her typically German nostrum - of imposing austerity until public finances are brought under control throughout the euro zone - has forced countries such as Greece, Ireland and Spain into a spiral of deflation with apparently no end.
Now the answer to the question who runs Europe is: probably no one. The political backlash against the austerity agenda is growing and now seems unstoppable.
European politicians and financiers accepted the election of the socialist François Hollande as president of France with a shrug, despite his avowed intention to fight austerity and give Europe "growth, jobs, prosperity and a future".
The thinking was that the old European Union system of governance, under which presidents, chancellors and prime ministers made decisions behind closed doors and the results were swallowed by passive electorates, would resume. In fact, May 16 - next Wednesday - when Mr Hollande travels to Berlin to meet the German chancellor - had been pencilled in as the date when he would start rowing back on his brave campaign promises to roll back the austerity agenda across Europe.
But all that has been thrown into doubt by the Greeks who have voted massively against the two parties, the conservative New Democracy and the socialist Pasok, which had accepted harsh budget cuts in return for an international bail-out.
The possibility of forming a stable government with the country so divided is slim. The likelihood is that the Greeks will hold another general election next month. Under the old rules, when Europe was a conspiracy of elites, the voters would have been expected to revise their copy and cast their ballots for the pro-austerity parties, as the price of being allowed to stay inside the euro zone.
But few people imagine that the Greeks can be so easily cowed. All around them they can see support for Mrs Merkel crumbling. The Dutch government, normally a staunch financial ally of Germany, has fallen after failing to agree a belt-tightening budget. The Irish had been expected to vote in a referendum on May 31 in favour of the European fiscal discipline pact, under which countries can get rescue funds only if they sign up to strict budget rules. But the "No" vote is creeping up.
Even the Italian prime minister, Mario Monti, who enjoyed a brief honeymoon as the poster boy of fiscal austerity in the profligate countries of southern Europe, seems to be pivoting in favour of growth.
Most confusing of all is the position of the bond markets. Having demanded the hair shirt of austerity to set European governments' finances in order, they now see - as should have been predicted - that too much austerity leads to shrinking economies, rising unemployment and ever greater indebtedness. As a senior executive of Fitch, the ratings agency, put it: "The markets are to some extent schizophrenic on this issue - we want both austerity and growth."
There is a simple answer to providing what the markets want: the richest country in Europe will have to fund growth in the poorer ones. This is what is known in Euro-speak as "solidarity" and it is anathema to Mrs Merkel and to the German voter. But the logic is clear. Germany is the big winner from the European monetary union, which has provided a ready market for its BMWs. If it wants the poorer countries to keep buying its exports when they can no longer borrow to fund consumption, Germany will have to reach for its wallet.
It would take a politician of greater vision and persuasiveness than Mrs Merkel to change tack on this issue and take the country with her. Already political analysts are predicting that, despite her personal popularity, her coalition may lose next year's election, so she is not likely to be generous with the German taxpayer's money.
Some analysts paint a grim picture of Europe returning to the toxic mix of the 1930s - deflation, the rise of extremist political parties, and war. The deadly bacillus in the last century was German Nazism, they claim, while today it is German austerity. Such comparisons are fatuous. The European Union is strong enough to withstand the financial crisis. There will be no war in Europe, but the traditional parties will have to find new ways to regain the confidence of voters, now that promises of rising prosperity are empty.
What the leaders of the euro zone need to do now is to tackle the problem of Greece. With every passing day the likelihood rises of Greece exiting from the euro and defaulting on its debts. Greece is a tiny economy and the default would be manageable, but this would set a dire precedent, and requires a massive European fighting fund to defend Spain from speculative attack.
There is one similarity with the 1930s. In that grim era the US could not offer any help to Europe and, in the view of many economists, the actions of the US government and the Federal Reserve only deepened the global depression. Since the end of the Second World War, Europe has always been able to look to the US for help in a crisis. For the first time, the US cannot help.
In that respect the travails of Europe are an example to the rest of the world. The global financier is drawing in its horns to focus on its domestic economy. In the same way, the global policeman is withdrawing from Afghanistan, leaving the regional powers to take charge of the mess.
The lesson of the European crisis is that the continent is learning to live without the comforting US safety net. The European Union will muddle through. It just has to find leaders who are equal to the challenge.
On Twitter @aphilps
