GERMANS seem beleaguered these days. Not only is their country the dominant actor in the euro crisis, but it is also being attacked for foisting on southern Europeans reforms and spending cuts that are prolonging recession and forcing unemployment unbearably high. All this is accompanied by none-too-subtle talk of the second world war and cartoons of Angela Merkel wearing a moustache.

Germans find this monstrously unfair. They have accepted a string of costly bail-outs in the past three years even though they were promised that the euro would never make them liable for other countries’ follies. The Cypriot bail-out showed that German patience with letting private creditors off the hook is exhausted. The attacks are having a political impact—witness the creation of a new anti-euro party (see article).

Yet the critics are mostly wide of the mark. Germany is not to blame for unpopular reforms; these are necessary for economic survival in a single currency that eliminates the options of independent monetary policy and currency devaluation. Mrs Merkel is not responsible for all budget cuts; these are unavoidable when governments become so indebted as to lose access to financial markets. She was not the author of the (abortive) idea to raid insured bank deposits in Cyprus; that was the Cypriot government’s attempt to spare offshore savers from bearing the entire bill for the island’s rescue.

The critics are more on target over Germany’s excessive insistence on austerity. Greece, Italy, Spain and most recently Portugal (see article) do belatedly have scope to slow the pace of deficit-cutting, but it took German and other creditors too long to give them a bit more leeway. Germany itself also has room to boost demand at home through fiscal policy and wage rises. With its economy close to joining the euro zone in recession, it would gain from exploiting that room to the full. Yet the fillip of more German demand would not necessarily save the rest of Europe from the difficult road ahead.

The oddity is that where Germany really now deserves blame, the critics are almost silent. The gravest long-term threat to the euro is Germany’s new-found reluctance to build a safer structure to underpin it. Mrs Merkel has a history of moving slowly and cautiously in the euro crisis, but recently she has started to go backwards.

The prime example is the banking union for the euro zone that she and her fellow leaders agreed on last year. The idea was that a single supervisor and a euro-wide bank-resolution mechanism would be better able to deal with large failing banks. Banking union would also sever the venomous connections that transmit insolvency from banks to governments and vice versa. Yet no sooner had the crisis begun to ease last autumn—after the European Central Bank (ECB) promised to do “whatever it takes” to save the euro—than Germany rowed back from banking union. It now argues that only future rescues, not legacy problems, should be covered, for example. Even agreement on a single supervisor is being held up on technical grounds.

The unhappy truth is that the euro zone is stuck in a halfway position. European leaders have agreed in principle that, to save the single currency, they must accept deeper economic and political integration, starting with their fiscal compact and continuing with banking union. But when it comes to turning principle into practice, obstacles keep emerging. And not just with banking union: leaders are now less ready to transfer more powers to Brussels or to create new mechanisms to hold countries to account. Instead, the hope seems merely to be that the ECB can keep the euro alive until the single currency is rescued by a world economic recovery.

Hope is not a policy

This is dangerously complacent. Already this year the messy bail-out of Cyprus has raised new fears in weaker countries that bank deposits may be at risk. The next euro-zone member likely to need a rescue is Slovenia (see article). An even bigger worry could be Italy, which is stuck in a political stalemate that seems to preclude further reforms to its moribund economy. Thanks to the ECB the markets have been in a quiescent mood, but just one unexpected political or economic accident anywhere could easily jolt them awake.

Mrs Merkel has reasons to tread carefully. Although most Germans strongly support the euro, they do not want the currency union to become a transfer union. Public opinion and the constitutional court make it harder for her to accept debt mutualisation. And although Germans generally seem to trust her handling of the euro crisis, she faces a testing election in September. Yet if the euro is to survive, Germany will have to embrace banking union as well as a degree of fiscal and political union. By pretending that full banking union is optional, German leaders are failing their voters, and prolonging the uncertainty in the rest of the euro zone.