Last week, the German Chancellor, Angela Merkel, deployed her considerable leverage, as the euro-zone Zuckermutter, to persuade Mario Monti, the Italian Prime Minister, to move up by several hours their big Friday whither-Europe meeting in Rome so that she could make it to Poland in time to attend that evening’s quarter-final match in the European soccer championship, between Germany and Greece. The “debt derby,” as some were calling the game, pitted austerity against amnesty: it was loan sharks vs. deadbeats, haves vs. have-nots, dos vs. don’ts.

The game was also a rematch, of sorts, of the famous 1972 Monty Python sketch depicting a showdown between an all-star squad of Greek philosophers and one of Germans, led by Nobby Hegel, with Leibniz in goal. Those teams spent most of the game strolling and philosophizing, ignoring the ball (“Here’s Marx—let’s see if he can put some life into this German attack. . . . Evidently not”), until Archimedes had a eureka moment and led a rush that ended with Socrates scoring on a header, from Heraclitus. That game (in spite of Kant’s and Hegel’s protests) had a clear winner, as did Friday’s (Germany, 4–2), but it is hard to imagine that the struggle over the fate of Europe can. In the squabble over who gets screwed the worst—be it sovereign-debt holders, Greek pensioners, German taxpayers, Spanish banks, or Italian self-determinists—whatever constituency gets its way will have to contend with Pyrrhic consequences. Each possible solution is really no solution at all.

Some have proposed the idea of a United States of Europe—with a centralized fiscal regime and greatly diminished national autonomy. The idea is that no country (Germany) wants to give away a good portion of its gross domestic product to another (Greece, or Spain) if it can’t have some control over or confidence in the recipient’s ability to balance its books. Of course, the democracies of Europe would sooner submit to rule by a Ministry of Silly Walks than agree to such a thing. The demise of the nation-state, in the place where it began, could safely be said to be still a few years away.

Last December, Thomas Sargent, a professor of economics at N.Y.U., gave a speech in Stockholm, after accepting the Nobel Prize, in which he proposed a couple of contrasting historical analogies involving the other United States—the U.S. of A. The gist was this: In the seventeen-eighties, the U.S. was unable to meet its obligations to the creditors who had bankrolled the Revolutionary War, because it had no means of raising revenue. The thirteen states, which had their own currencies, owed a third of the debt. Alexander Hamilton got the federal government to assume all the states’ debts, and also secured its ability to impose taxes and tariffs. In doing so, he cannily gave the creditors an incentive to support a new federal system, which had been codified in a new Constitution. The Constitution needed capital on its side. The Bill of Rights, you might say, arose from a bailout.

“Fiscal crises tend to lead to political revolutions,” Sargent said last week, over the phone from Europe, where he’d spent ten days travelling in Italy and Spain, for research. He seemed to be suggesting that Europe will need to be turned on its head before it can get back on its feet. “Here you are with over twenty democracies that set their own tax and spending policies,” he said. “All the promises don’t fit together.” In his Nobel speech, he recounted how, around 1840, the American states had faced another fiscal crisis. To finance the building of canals and railroads, they’d borrowed heavily from creditors, many of them foreigners, who had expected the federal government to bail out the states again. This time, it did not. The states defaulted, and had to come up with balanced-budget provisions. Another revolution, of a kind.

Sargent has a halting, poker-faced manner and a tinge of California in his voice (he’s from Pasadena), which makes him seem laid-back and self-effacing. He’s no Paul Krugman. One could say that he has a greater faith in markets, but he has objected, fairly, to labels such as “non-Keynesian.” He doesn’t venture to make prescriptions for Europe. “It seems a lot of the advice I see in the press is naïve,” he said. “Many of the recommendations would require that institutions violate the rules and laws under which they were created and are run.” The European Central Bank is legally constrained in what it can do. The European Stability Mechanism—whose possible remedial schemes everyone spent last week guessing at—doesn’t even exist yet. Sargent will allow us to imagine, though, that Europe is a little like the United States in the seventeen-eighties, give or take some very significant differences, among them the absence, on Friday, in Rome or at the stadium in Gdansk, of anyone quite like Alexander Hamilton, to say nothing of Kant or Archimedes. ♦