This is about Lisbon, not just the euro
The Irish debt crisis that looks set to reach a denouement in the next 48 hours is being splashed as a contagion story that poses a threat to the euro.
I think it is about something bigger: the Lisbon Treaty itself and the terms of Franco-German dominance in the pact.
Let's step back and ask how we got here.
In May the eurozone ripped up its no-bailout rules and cobbled together a mechanism to solve the Greek debt crisis. Then there really was a contagion threat, which could even have sunk Britain and Spain.
But as a result of a lot of table banging late at night they agreed a 440bn euro (£374bn) fund to bail out countries who could not raise money on the international markets. With a further 60bn European Union (EU) fund and 250bn from the International Monetary Fund (IMF) that put a 750bn backstop on the debt crisis, which has lasted until now.
So why the danger?
As I wrote then, the essence of the European Financial Stability Facility (EFSF) deal is that northern Europe took control of southern Europe. South Europe was supposed to be meeting Maastricht targets on debt and deficit, but could not: so the price of a north-European funded bailout was to be fiscal control from the centre.
The eurozone had always been a monetary pact without enforceable fiscal rules and now the French and Germans would enforce fiscal sovereignty.
But it was easier said than done.
The EFSF mechanism technically breaches the eurozone's rules. It is temporary and runs out in 2013. The original idea for a more permanent mechanism was based on imposing fines on countries that broke the rules. That is, if you are going to have a law, breaking it should mean an automatic penalty.
As it became clear the indebted countries might be reliant on Franco-German funding a lot longer than 2013, Chancellor Angela Merkel and President Nicolas Sarkozy met in Deauville last month to stitch up a new deal. Instead of fines for countries there would be penalties for investors. And the future governance of Europe would not be enforced like a law - it would be more like the relationship of perpetrators and policemen in certain parts of southern Europe: enforced by negotiation.
In any new arrangement after 2013, "wholesale restructuring of debts" would follow a euro-led bailout of a country. That means investors losing their money - as they did with for example the Argentine debt default. This is what spooked the markets - as they began to believe the "haircut" would be imposed during the current bailout as well.
But there is one other detail of Deauville to remember: Merkel and Sarkozy concluded they would have to enshrine the new arrangement in a change to the Lisbon Treaty. Lisbon II would create an enforceable fiscal government for Europe and impose that quaint old fashioned north European concept on the rest: namely that if you lend money idiotically you can lose some of it. Sarkozy agreed to reopen the treaty in return for Merkel's agreement to withdraw the idea of automatic fines.
What the current euro crisis does is throw into question this whole process. The bond markets are yet again signalling they will respond to any threat of "haircut", i.e. losses by selling the debts of the stricken countries, forcing yet more EU bailouts.
The truth is Angela Merkel cannot sell any further German bailouts of southern Europe to her voters without some significant seizure of economic sovereignty by Germany over the rest. It is not clear if Nicolas Sarkozy can sell anything at all to the French. No government in Europe could currently sell a referendum on Lisbon II to its voters. That's why there is stasis.
Up to now David Cameron has said he will not stand in the way of a treaty change that only affected eurozone members, citing Britain's interest in stabilising the eurozone as a market. Conservative views are divided between those who would use the crisis for a new Lisbon referendum and those who would use the crisis to extract maximum realpolitic advantage on other issues: budget, trade, treaty opt-outs etc.
But the problem is now that Europe's stability has to be founded on a new bargain: southern Europe has to endure austerity for half a decade; northern Europe will get effective sovereignty and the power of sanction over the rest. It is hard to see this new arrangement falling into place except at the other side of a crisis.
And in the process European populations will ask themselves: is this what we originally signed up to?