Europe's crisis that won't go away
Exactly five years ago Europe awoke to its own crisis.
In October 2009 the incoming Greek government revealed that its budget deficit was not 6.7%, as publicly stated, but closer to 13%.
The published accounts were as good as fakes. In the weeks and months that followed, Europe had to confront the possibility that a eurozone country might not be able to fund itself.
So the eurozone crisis was born.
It was precipitated by the financial crash of 2008 but that only served to expose the design faults of the single currency.
For five years this crisis has overshadowed everything else in the European Union. This week when European leaders meet for a summit it will intrude again.
For over a year the financial markets have acted as if the crisis was over. They bought into the much-repeated claim that recovery had taken root.
They were right in one sense; the threat of the eurozone breaking up had passed and they were no longer worried about insolvency.
Last week, however, a wider reality emerged and the markets were rattled. It was not just about Europe.
They were unnerved by Islamic State, by the Fed reducing the monetary flow, by the weakness in emerging markets, by fears of Chinese debt.
But the game changer was Europe and the figures that showed that Germany, the motor of the eurozone economy, was close to recession, its growth was slowing and its exports showed the largest monthly decline in five years.
Investors began factoring in the risk that Europe was inching towards deflation with a future of stagnation.
Even so, apart from Greece, the bond spreads hardly widened and borrowing costs remain historically low.
For not everything is negative
- The eurozone is running a trade surplus
- Exports are performing strongly
- Deficits are coming down
- Some countries which needed rescuing have not only left their bailout programme but are growing again
But there is another reality: the legacy of insecurity.
Officials and economists have consistently underestimated the impact of the crisis on the lives of ordinary people.
It largely goes unreported and yet it explains why consumers in so many countries are reluctant to spend.
A crisis cannot be over when 25% of young people are without work.
A crisis cannot be over when the middle class in Greece, Italy and France feel battered and fearful.
Two weeks ago in Milan I heard from a middle-class manager who said there were no jobs for over 50-year-olds.
You get a sense of the crisis when you realise how many Italians have raided their savings or how many families in Spain are dependent on money from grandparents.
Or how many so-called "new jobs" are short-term contracts. Real/nominal wages are stagnant and investment, in these circumstances, remains weak.
All of this fuels what Bill Clinton calls "resentment votes". It breathes wind into the sails of Greece's radical left leader Alexis Tsipras and the National Front (FN) in France.
Europe once again is at a crossroads. The drama will play out over the next few weeks.
France and Italy are not only opposed to continuing austerity which they identify with Germany, but Paris has decided to openly flout the rules governing eurozone budgets.
France's 2015 budget shows it will not be back in line with the stability and growth pact until 2017.
At the height of the eurozone crisis one of the key reforms demanded by Germany was that the European Commission would be given new powers to monitor national budgets and, if necessary, to levy fines against the rule-breakers.
Next week the Commission will have to accept or reject the French budget. It is the first sensitive decision that the Juncker Commission will have to take.
Politically, it is hugely sensitive.
There are those in Brussels who are warning that to fine France would play into FN leader Marine le Pen's hands. Others are saying that there cannot be one set of rules for big countries.
There are many German politicians lining up to warn that, once again, the rules governing the single currency are being ignored.
Publicly, Angela Merkel is insisting that the strengthened rules must be obeyed. But France is defiant. "We won't cut any more," says its finance minister.
There is speculation in Germany that Berlin is determined to avoid an open clash with Paris. There is talk of reviving the idea of France essentially signing a contract that commits it to taking certain steps (structural reforms) in exchange for greater flexibility over the budget.
The most likely outcome is a murky compromise. That is the Brussels way and Jean-Claude Juncker is unlikely to want an early clash with France.
But this is only part of a wider divide.
The French are suggesting to Berlin that it invests an extra 50bn euros (£40bn; $64bn) over the next three years to increase demand.
The French are openly dismissive of Germany's moves to balance its budget at a time of declining growth. They call it German dogma.
The Italians too are testing the rules of the fiscal pact with a budget which includes tax cuts for workers and firms. Rome is insisting that these steps are covered by the "exceptional circumstances" clause of the pact.
What Paris and Rome want is a relaxation of the budget rules, for Germany to make big investments in its infrastructure, for Europe to boost spending and for the ECB to turn on the monetary taps with quantitative easing.
What you hear in Berlin is that France and Italy need to move beyond talking about freeing up the labour market and to implement much-needed reforms.
If the great divide widens and Germany digs in its heels then much is at risk.
Simon Tilford from the Centre for European Reform says: "This is a recipe for stagnation, deflation and political populism in France and Italy. It may culminate in a breakdown in relations between Germany and these countries and could even lead to a eurozone break-up."
Germany and France have demonstrated during this crisis that when the eurozone is at risk they compromise.
But there is a fundamental issue here; whether France will be allowed to ignore the rules that were introduced to safeguard the single currency.