The survival of the common European Union currency, free movement across national borders and trans-Atlantic collective security are all in serious doubt. Europe’s leaders are in denial or paralyzed.

How could any European leader let these pillars of the Continent’s well-being be jeopardized? The problem is there are no European leaders, just a German chancellor, a French president, an Italian prime minister and others who profess a continental vision but never look much beyond their local political interests.

Europe’s unraveling is also a problem for Americans. A fracturing of the euro could drag down the global economy. A breakdown of NATO would mean the United States would have to bear an even bigger security burden. More than a year into their debt crisis, major European leaders are still unable to make the necessary tough decisions. The constructive way out would be to restructure excessive debt, recapitalize affected banks and relax austerity enough to let debtor countries — Greece, Ireland and Portugal are most at risk — grow their way back to solvency. No one country could afford to finance such a solution, but Europe as a whole could.

In a welcome concession to reality, France’s president, Nicolas Sarkozy, announced that French banks are now prepared to “voluntarily” extend the maturity of some Greek debt. That could help, but only if all of Europe follows France’s lead — Germany’s banks have yet to sign on — and then eases its pressure on Athens for still more austerity. Selling this to European voters will require politicians to tell the truth. The alternative is to let the euro-zone break apart and trade suffer across the Continent. Read full article in New York Times...