Angela Merkel has begun to sound awfully like Margaret Thatcher. Germany has caught the British disease. If the affliction keeps hold, Europe is doomed. The European Union has learnt to live with Britain's bean-counting. It will not survive a German decision to play the same zero-sum game.

The international investors who have put the eurozone under siege are placing two mutually supportive bets. One is about economics – the hard numbers of budget deficits, debt-to-GDP ratios and subprime sovereign debt. The other is about politics – intangible, but ultimately more important things like leadership and political will.

The first of the bets says that on any reasonable assumptions Greece will not be able to pay down its debts; and that Spain and Portugal could well find themselves in the same predicament. One or more of these countries will see the effort to put their economic houses in order tip them into deflation traps where austerity becomes self-defeating.