BERLIN – Europe’s situation is serious – very serious. Who would havethought that British Prime Minister David Cameron would call on eurozonegovernments to muster the courage to createa fiscal union (with a common budget and tax policy and jointly guaranteedpublic debt)? And Cameron also argues that deeper political integration is theonly way to stop the breakup of the euro.

A conservative British prime minister! The European house is ablaze, and DowningStreet is calling for a rational and resolute response by the fire brigade.

Unfortunately, the fire brigade is being led by Germany,and its chief is Chancellor Angela Merkel. As a result, Europe continues to tryto quench thefire with gasoline – German-enforced austerity – with the consequencethat, in a mere three years, the eurozone’s financial crisis has become aEuropean existential crisis.

Let’s not delude ourselves: if the eurofalls apart, so will the European Union (theworld’s largest economy), triggering a global economic crisis on a scale thatmost people alive today have never experienced. Europe is on the edge of an abyss, and will surelytumble into it unless Germany – and France –alters course.

The recent elections in France and Greece, together with local electionsin Italy and continuing unrest in Spain and Ireland, have shown that the publichas lost faith in the strict austerity forced upon them by Germany. Merkel’s kill-to-cure remedy has runup against reality – and democracy.

We are once again learning the hard way that this kind of austerity, whenapplied in the teeth of a major financialcrisis, leads only to depression. This insight should have been commonknowledge; it was, after all, a major lesson of the austerity policies ofPresident Herbert Hoover in the United States and Chancellor Heinrich Brüningin Weimar Germany in the early 1930’s.Unfortunately, Germany, of all countries, seems to have forgotten it.

As a consequence, chaos looms in Greece, as does the prospect ofsubsequent bank runs in Spain, Italy, and France – and thus a financial avalanche that would bury Europe. And then? Shouldwe write off what more than two generationsof Europeans have created – a massive investment ininstitution-building that has led to the longest period of peace andprosperity in the history of the continent?

One thing is certain: a breakup of the euro and the EU would entailEurope’s exit from the world stage. Germany’s current policy is all the more absurd in view of the bitter political andeconomic consequences that it would face.

It is up to Germany and France, Merkel and President François Hollande, todecide the future of our continent. Europe’s salvationnow depends on a fundamental change in Germany’s economic-policy stance, and inFrance’s position on political integration and structural reforms.

France will have to say yes to a political union: a common government withcommon parliamentary control for the eurozone. The eurozone’s nationalgovernments already are acting in unison asa de factogovernment to address the crisis. What is becoming increasingly true inpractice should be carried forward and formalized.

Germany, for its part, will have to opt for a fiscal union. Ultimately,that means guaranteeing the eurozone’s survival with Germany’s economic mightand assets: unlimited acquisition of the crisis countries’ government bonds bythe European Central Bank, Europeanizationof national debts via Eurobonds, and growthprograms to avoid a eurozone depression and boost recovery.

One can easily imagine the ranting inGermany about this kind of program: still more debt! Loss of control over ourassets! Inflation! It just doesn’t work!

But it does work: Germany’s export-led growth is based on just suchprograms in the emerging countries and the US. If China and America had not pumped partly debt-financed money into theireconomies beginning in 2009, the German economy would have taken a serious hit.Germans must now ask themselves whether they, whohave profited the most from European integration, are willing to pay theprice for it or would prefer to let it fail.

Beyond political and fiscal unification and short-term growth policies,Europeans urgently need structural reformsaimed at restoring Europe’s competitiveness. Each of these pillars is needed ifEurope is to overcome its existentialcrisis.

Do we Germans understand our pan-European responsibility? It certainlydoes not look that way. Indeed, rarely has Germany been as isolated as it isnow. Hardly anyone understands our dogmaticausterity policy, which goes against all experience, and we are consideredlargely off-course, if not heading into oncoming traffic. It is still not too late to change direction, but now we haveonly days and weeks, perhaps months, rather than years.

Germany destroyed itself – and the European order – twice in the twentiethcentury, and then convinced the West that it had drawn the right conclusions.Only in this manner – reflected most vividly in its embrace of the Europeanproject – did Germany win consent for its reunification. It would be bothtragic and ironic if a restored Germany, by peaceful means and with the best ofintentions, brought about the ruin of theEuropean order a third time.