THE doom merchants are eating their words. Greece has not left the euro. The currency has not collapsed. And neither seems likely in 2013. Willem Buiter of Citigroup has revised his odds on “Grexit” down from 90% to 60%. This week S&P, a ratings agency, even raised Greece’s credit rating by six notches to B-. Yet the pessimists did not overestimate the euro’s problems, so much as underestimate the political will to do enough to stop a euro break-up—even if not enough to repair its structural flaws.The European Union’s Maastricht treaty created a single currency without a single state. Each country was meant to be responsible for its own budget and economic policies with rules (often ignored) to stop them running up too much debt. There were to be no bail-outs, either overt (by members) or covert (by the European Central Bank). Yet gradually cleaning up fiscal messes has become more of a collective endeavour. If it were in Dante’s Inferno, the euro would have moved from the eighth circle (the penultimate one), when flatterers are immersed in excrement, to the third, where foul stuff rains down on gluttons. Salvation is still a long way off.It helps that...
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