What's the Latest Development?

Thanks to the resiliency of Germany's economy, its head of state, Angel Merkel, is now in the European driver's seat. And while she has been criticized for acting slowly, her options, to be sure, are regrettable ones. With several European nations facing bankruptcy, a breakup of the E.U. would create global financial chaos. So in order to hold it together, Merkel must convince Germany to foot the bill. "It's only a slight exaggeration to say that the fate of the world is in one woman’s hands," said Peter Coy, a writer for Bloomberg BusinessWeek.

What's the Big Idea?

Merkel surely will not encourage the dissolution of the European currency as a solution to the continent's debt problems, so what is she likely to do? The clearest solution may be to change the rules for the European Central Bank, allowing it to function more like America's Federal Reserve. Germany has resisted giving the ECB the authority to print money or buy government bonds because of its fears over inflation, a condition that existed in Germany shortly before the rise of the Third Reich.