Europe is losing a war between its elected governments and unelected rating agencies. Governments are trying to govern, but the rating agencies still rule. Electorates know this, which is why some European Union member states oppose fiscal transfers to others.

Yet such states, and notably Germany, gain from the euro. Its value is lower than would have been the case for an alternative “core” eurozone of fewer countries, making exports more competitive. Defaults by the eurozone’s most debt-exposed countries would hit banks and pension funds in both the core and the periphery. No one is immune.

The answer is not less Europe, but more. Both Jean-Claude Juncker, president of the Ecofin and Eurogroup councils of finance ministers, and Giulio Tremonti, Italian minister of finance, have argued that a conversion of a share of national debt to EU bonds would stabilise the current crisis. We agree.