Will Angela Merkel Act, or Won't She?

It was Thanksgiving Day in the U.S., but just another tension-filled Thursday in Strasbourg, part-time home to the European Parliament and thus the fulcrum upon which the world’s financial future teeters. Angela Merkel arrived uncharacteristically late, keeping Nicolas Sarkozy and Mario Monti waiting. No matter. The press conference couldn’t start without Merkel any more than a performance of Hamlet could begin without the prince.

The day before, the debt crisis that’s been spreading for two years singed Germany, as investors shied away from an auction of 10-year government bonds. By the market close, Germany’s 10-year borrowing costs stood at 2.2 percent a year, three-tenths of a percentage point higher than those of the wastrel U.S. For Merkel, it seemed like a moment of truth. Germany is the sole country in a position to prevent a collapse of the euro currency—an event that could trigger a financial crisis and perhaps another global recession. It’s only a slight exaggeration to say that the fate of the world is in one woman’s hands. Yet to the frustration, bewilderment, and mounting anger of leaders from Paris to Beijing to Washington, Merkel repeatedly has refused to act.