EUROPE - It was almost exactly five years ago that the euro financial panic which threatened to tear Europe apart erupted in Greece. So there is an element of ironic symmetry in the fact that the year ends for Europe's currency with another Greek political crisis.
Chances are high that the latest troubles in Greece will not shatter the euro; the armies of financial analysts who frequently predicted this were invariably proved wrong.
Still, Europe's single currency will continue to be buffeted by political showdowns. And the reality remains that the euro's survival is entirely in the hands of Germany, precisely the sort of outcome nobody wanted when the currency was created.
The Greeks invented drama and, as their current internal political showdown indicates, they remain true to their vocation. The crisis started when the Greek government decided to call presidential elections.
In theory, that should be irrelevant: it's up to Parliament rather than the public to elect the president, and Greece's head of state is of the ceremonial kind. So, this crisis resembles a storm in a cup of Greek yogurt.
Apart from one snag. Under Greece's Constitution, if Parliament fails to elect a president in three consecutive votes held over three weeks, fresh general elections have to be called.
And, since the ruling centre-right government does not have sufficient parliamentary seats to elect its presidential candidate, the danger of early general elections is pretty high.
That is an awful prospect, for the party which now tops the popularity stakes in Greece is an extreme left populist group which wants to repudiate the country's foreign debts and return to Greece's old habits of borrowing and spending as though nothing had happened.
Unsurprisingly, therefore, investors are spooked.
But matters are unlikely to go that far.
To start with, Greece's Prime Minister Antonis Samaras, a wily political operator who has been in and out of government for decades and who sits for the same parliamentary constituency his family has controlled since World War II, would not have called this presidential showdown if he didn't believe he could win it.
All that Mr Samaras needs to do is to persuade a few opposition MPs to support the government's presidential candidate, and that is not difficult in a country where people often enter politics in order to line their pockets.
But, even if Mr Samaras fails, new Greek general elections are not necessarily a disaster for Europe, even if they result in the election of an irresponsible populist government.
With most financial markets now on better footing and European banks recapitalised, the European Union can now afford to simply ignore a misbehaving Greece which, after all, accounts for only 1 per cent of the continent's overall gross domestic product (GDP).
The real worry about the euro is elsewhere; that while the Greeks huff and puff in public with no consequence, France and Italy - the euro zone's second- and third-biggest economies respectively - are flouting the rules governing the single currency with more silent, yet more methodical and potentially disastrous consequences.
Collapse of the souffle
Over the past five years, France changed its position on the management of the euro no fewer than four times, but always with one objective in mind: to change as little as possible in actual practice.
France started the euro crisis in self-denial, claiming that it was all due to some shadowy "Anglo-Saxon financial speculators" who just needed to be disciplined.
As that wore thin, the authorities in Paris hung closely to the Germans, castigating Greece, criticising Italy and advocating prudence elsewhere in Europe; the idea was that, if the French merely sounded like Germans, financial markets would ignore the fact that France is no Germany when it comes to economics.
When President Francois Hollande came to power in May 2012, the strategy changed again, to one of trying to persuade the Germans to relent, by allowing France a longer period of time to adjust its national debt and budget deficits.
But when that failed and the Germans proved obdurate, the French simply ignored austerity measures by telling the rest of Europe that they are adopting the Frank Sinatra doctrine, who once famously sang "I did it my way".
French Finance Minister Michel Sapin has admitted his country would run a budget deficit of 4.3 per cent of GDP next year - far from the 3 per cent beyond deficit it had previously pledged.
Stripping out the effects of the weak economy, the government's planned cost cuts would amount to just 0.2 per cent of GDP, falling short of cuts worth 0.8 per cent that it had agreed upon with the EU.
Protests from the European Commission, the union's executive body with specific powers to supervise the execution of national budgets, were simply brushed aside as irrelevant.
The same is happening in Italy, where the youthful centre-left Italian Prime Minister Matteo Renzi came to power 10 months ago claiming to be able to walk on water, only to drown in a sea of economic troubles on his first attempt.
Italy hoped to finish the year with only a 0.2 per cent drop in its GDP, but it looks like the year will end with a 0.8 per cent decline, a huge and ominous turn for the worse.
Meanwhile, the country's overall public debt levels have climbed to 135 per cent of Italian GDP, more than double what is allowed for euro countries. The Renzi effect has collapsed like a badly-baked souffle.
This is not to say that these countries are simply guilty of complacency. Italy has implemented reforms to its parliamentary systems and labour regulations.
It has also cut its corporate taxes. Meanwhile, the French government has promised to make its labour force more flexible, and has vowed to sell state-owned assets in order to reduce its debt.
But it is also true that none of these provisions are sufficient, and that many will take years before they bear fruit.
"So far, reforms haven't broken with the piecemeal approach of the past," concluded leading French economist Jean Pisani-Ferry and his German colleague Henrik Enderlein, who were recently tasked by their respective governments to compile a joint assessment of the progress of economic reform.
In theory, that should not matter too much. Financial markets remain reassured by a pledge from Mr Mario Draghi, president of the European Central Bank (ECB), to do "whatever it takes" to ensure that the euro survives the crisis.
Nevertheless, it is worth remembering that this pledge was effective until now precisely because - like nuclear deterrence - it never had to be redeemed.
But if push comes to shove and if the ECB has to buy European governments' debt - which is what it would have to do if the euro comes under attack again - Germany would oppose this, since the Germans do not believe that the ECB is empowered to undertake such transactions.
The euro was invented largely in order to prevent German economic influence from being translated into political influence over the rest of the continent: the hope was that a single currency will mask vastly different power structures.
But the result has been precisely the opposite: everything now depends on Germany in Europe.
GERMAN Chancellor Angela Merkel is trapped in her own dilemma. On the one hand, she cannot afford to precipitate a renewed euro crisis by demanding that France and Italy do more to cut spending and put their finances in order.
But at the same time, she has to bow to a domestic backlash inside Germany, which opposes offering any further cash to bail out bankrupt European countries.
The result is that Europe remains locked in a pledge for austerity, while not actually applying policies of austerity, the worst of both worlds, since the very idea of economic reform is being discredited, and to little practical effect.
The real danger for Europe is not that its currency will collapse, but that it will remain trapped in a cycle of slow growth, high unemployment and low inflation, a sort of Japanese-style deadly embrace which pulls down all the continent's economies.
And that's not an encouraging note on which to embark on a new year, which will mark the 70th anniversary since Europe emerged from the ashes of World War II.
This article was first published on December 22, 2014. Get a copy of The Straits Times or go to straitstimes.com for more stories.