Everything is being stress-tested in this crisis. Europe, too. The weak points in the way the European Union has been put together, politically and economically, over the 20 years since the world changed in 1989, are all showing up. As we saw with the investment banks last autumn, if one bulkhead bursts, others are likely to follow.

Start with the eurozone. To those that have it, the euro has been a source of stability and strength in this storm. Aspirants to membership of the eurozone, like Poland, pray that they were already members. Even in Britain, a discussion has revived about whether or not we would be better off with the euro. Yet at the same time, the stresses between different members of the eurozone are becoming acute. They go back to its original design.

Asked for the first lesson he draws from Japan's decade of stagnation, a leading Japanese analyst says: you need the closest possible co-ordination between your monetary and your fiscal authority. The eurozone has one monetary authority but 16 different national fiscal authorities. They are, in practice, only loosely bound by a growth and stability pact, while subject to intense domestic political pressures - for democratic politics in Europe are still almost entirely national. This has consequences. So, for example, because eurozone governments have behaved differently over the years, their bonds have been valued somewhat differently in the markets. In times of crisis, these tensions increase. Safety first, says the investor. So even if the Greek government offers me a better return for lending it money, I may prefer to lend to the German government. The more investors think that way, the greater the difference grows. In the end, something has to give.

One way out of this, recently advocated by George Soros and others, is to create a single eurozone government bond. Since that would include weaker and riskier governments, Germany would have to pay slightly more to borrow the money it needs through such a bond. Now imagine how that will play with German voters. What, as Germany plunges into recession, we, the German taxpayers, must pay to save Greeks or Italians from the consequences of their own fiscal irresponsibility? Unerhört! Unmöglich! So the politicians who have to make this decision would pay the price in the European elections this summer and the federal election this autumn. For them, there are no votes in Greek or Italian gratitude. In short, because we have a monetary union but not a political one, decisions that put the long-term European interest before the short-term national interest are at once more needed and less rewarded.

Even more dramatic is the predicament of the east central European countries that joined the EU over the last decade but are not yet (with the exception of Slovakia and Slovenia) in the eurozone. In recent weeks, the tempest has hit them with a vengeance. Far from finding safety through being aboard the good ship EU, their close financial relationship with western Europe has become part of their problem.

Twenty years ago, after the velvet end of communism in 1989, they set out to build capitalism without capital. Therefore they opened up liberally to western investment. Most of their bigger banks now have western owners or majority shareholders. Hit by a financial crisis whose origins did not lie in east central Europe, those western owners pulled in their horns. Their core business and home markets came first, while east central Europe fell victim to a blanket warning against "risky emerging markets". Western loans dried up. And as east central European currencies fell, these countries were left struggling to pay the interest on existing loans denominated in western currencies. This is not just a problem for governments and companies. Quite a few middle-class Polish families, for example, have taken out new home loans denominated in Swiss francs. When the value of the Polish zloty collapsed, their interest payments almost doubled overnight.

Of course different countries have fared differently. Hungary and Latvia have already had to go cap in hand to the IMF. The rating agency Standard & Poor's has just cut Latvia's credit rating to junk status, where it joins Romania.

What they all have in common is a sense of desperation and injustice. At a panel discussion in Vienna last weekend, I heard the leader of Hungary's main opposition party, Viktor Orban, complain of "financial protectionism" on the part of the west. That is mild language compared with the populist, anti-western and anti-liberal rhetoric that will flow if this continues.

More dramatic still is the plight of countries not yet in the EU: the third circle, so to speak, of Europe's current hell. Even before the financial crisis hit, the EU's magnetic power was visibly fading in places like Turkey, Ukraine and Bosnia. Now even more so. Ukraine is a mess. There are alarming reports that Bosnia is sliding backwards, with the Bosnian Serb leader stirring the old devils of ethnic separation.

I do not say that the fissiparous tendencies will inevitably triumph in any of the three circles. I do say that the future of the whole European project, as we have known it since the late 1940s, and particularly since 1989, is now at issue. The forces of integration and disintegration, of European solidarity and national egoism, the centripetal and the centrifugal, are finely balanced. There are a few signs of Europe getting its act together, such as last weekend's Berlin summit and yesterday's announcement of proposals for a Europe-wide financial supervisory framework. Optimists will argue that crises have been the catalysts of European integration throughout its history.

It is clear is that we cannot stay where we are. If we don't go forwards we will go backwards. Forwards not, I emphasise, to some idealised United States of Europe, but to a practical construction strong enough to weather the storm. Whether we achieve that will depend on three things: global forces beyond our control, the quality of European leaders, and the space and trust they are afforded by their national electorates.

Earlier this week I visited Jean Monnet's touchingly modest home in the countryside south-west of Paris. It contains reminders of even more dramatic times, including a copy of the 1940 proclamation of a Franco-British Union and an old typewriter on which was drafted one of the original proposals for what became the Schuman declaration - which led to the European Coal and Steel Community, which led to the European Economic Community, which eventually became the European Union. Europe, Schuman famously declared, "will not be made all at once or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity."

Monnet himself liked to quote a saying that there are two kinds of people: those who want to be someone and those who want to do something. Yet even if today's European leaders prove themselves to be of the latter sort, in democracies they can only do as much as we, their national publics and voters, let them do. Whether I look at Britain or Poland, France or Germany, Latvia or Austria, I do not, today, think we will let them do enough.

timothygartonash.com