Sometimes, sheer immodesty compels me to ask, of my long record of prescience, what did I know, and when and how did I know it? In the summer of 2005, Foreign Policy magazine asked its contributors to name one taken-for-granted thing that they thought was overrated or would not last. After a brief interval of reflection, I chose the euro.

I can be absolutely certain that I did not do this because I wanted to be right. On the contrary, I would much have preferred to be mistaken. When I still lived in Europe, I was one of the few on the left to advocate an enlargement of the community and to identify it with the progressive element in politics. This was mainly because I had seen the positive effect that Europeanism had exerted on the periphery of the continent, especially in Spain, Portugal, and Greece. Until the middle of the 1970s, these countries had been ruled by backward-looking dictatorships, generally religious and military in character and dependent on military aid from the more conservative circles in the United States. Because the European community allowed only parliamentary democracies to join, the exclusion from the continent’s heartland gave a huge incentive to the middle class in these countries to support the overthrow of despotism.

The same attraction had a solvent effect on other countries, too. Once the Irish Republic became a member and was thus part of the same customs union as the United Kingdom, the border with Northern Ireland became an irrelevance, and it was only a matter of time before the sectarian war would begin to seem irrelevant. In Cyprus, the wish of both Greek and Turkish Cypriots to become European was a potent element in setting the stage for negotiations to end that post-colonial partition. The modernization and opening of Turkey, highly uneven as it is, has a great deal to do with the same pull toward a common European system. And it goes without saying that the people of Eastern Europe, even while the Berlin Wall still stood, measured their aspirations by how swiftly they, too, could meet the criteria for membership and escape the dreary, wasteful Comecon system that was the Soviet Union’s own parody of a supranational agreement.

The logic of this seemed to necessitate a single currency, which in turn meant that a unified Germany, instead of dominating Europe, as the British and French reactionaries had always feared, would become a Europeanized Germany. The decision to give up the deutsche mark in 2002 must rank as one of the most mature and generous decisions ever taken by a modern state, full confirmation of the country’s long transition from Nazism and Stalinism and partition, Europe’s three great modern enemies.

As it happens, though, it was a German-speaking fascist who awoke my misgivings. I was interviewing Jörg Haider, the late leader of Austria’s Freedom Party, just as the euro notes and coins were coming into circulation almost everywhere between Finland and Greece. With a disagreeable sneer, he asked me if I really liked “the new Esperanto money.”

This was actually a rather clever psychological thrust. The old dream of a world language called Esperanto that would abolish the Babel of competing tongues is considered a quixotic one for obvious reasons. Nobody is going to learn a language that hardly anybody speaks. There is a further quixotry involved: The invention of Esperanto ended up doing no more than adding another minor language to the mix. Now consider the euro: What if it ends up being one European currency among many instead of the money equivalent of a lingua franca?

How tragic it is that the euro system has already, in effect, become a two-tier one and that the bottom tier is occupied by the very countries—Greece, Portugal, Spain, and Ireland—that benefited most from their accession to the European Union. The shady way in which Greece behaved in concealing its debts, and the drunken-sailor manner in which other smaller states managed their budgets, has, of course, offended the Germans. It is openly said in Germany now that it would be better to bring back the deutsche mark than to be bailing out quasi-indigent and thriftless banana republics. Talk of that kind doesn’t take long to evoke a biting response: Soon enough, Greek Foreign Minister Theodoros Pangalos was reminding nationalist audiences at home of the wartime German occupation of Greece and the carrying-off of the country’s gold reserves. “Don’t talk about the war” is a strong unspoken principle of European fraternity, and it didn’t require very much strain to produce a major fraying of this etiquette. You can count on this atmosphere getting much worse as second-tier countries are requested by Berlin to haul in their waistlines and as Germans grumble about having to tighten their own belts to subsidize less efficient regimes.

The problem is endlessly reported as one of “bailout” terms and “packages” for “debt relief.” These are all euphemisms, and they are also all short-term. The fact is that default has entered the European vocabulary on a national scale and therefore that this First World club has its own Third World to contend with. In any case, the great justification for the European Union was always political and not economic, and if the symbol of the second-order dimension becomes tarnished, then the first ideal will not escape great damage, either.

“PIGS” is the unlovely acronym for the nations—Portugal, Ireland, Greece and Spain—that constitute the shiftless out-group within the in-group. (Italy is sometimes included in the club.) It’s very improbable that nations that haven’t yet signed up to the euro—Britain and many Scandinavian states among them—will now do so. And that being the case, with the euro just another bill you have to exchange when moving around within Europe—then what becomes of the dream? I wish I could have ignored the croakings of an obscure Austrian fascist, but there’s something about European history that makes this seem rash.

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