Last Updated May 11, 2010 10:58 AM EDT
There is something inevitable about the enthusiasm passing, but if the Europeans aren't careful, they're going to go from "shock and awe" to amateur hour in a New York minute. And after last week's market rout in New York, we know how much money can be lost in a minute.
The euro has already headed south again -- toward Athens, you might say.
It doesn't help that a key European is proving, well, half-hearted about the bailout at a time when stability demands rallying around it, warts and all. Axel Weber, the president of Germany's Bundesbank, in a stunning public break with his ECB colleagues, said he is "critical" of the central bank's plan to buy government bonds to calm financial markets.
This is the guy the Germans want as the new ECB president when Jean-Claude Trichet's term winds down next year!
In my mind's eye I have a normal IMF stabilization program, one in which the fund commits cash in exchange for admittedly very difficult steps that a country must take to right its own ship. Those are primarily a fiscal matter, but the work also involves reforms to raise an economy's longer-term potential.
The Europeans have committed the cash. Where is Part Two? (To be fair to Herr Weber: the absence of Part Two makes it hard to rally around the package.)
Surely John Lipsky, the first deputy managing director of the IMF, had the same thing on his mind when he called on key European countries -- here we are talking principally Greece, Portugal and Spain -- to seize the moment and prevent contagion.
"The bedrock of dealing with these problems are the efforts of stabilization and adjustment of each of the individual countries," Lipsky said.
Greece is still pretty much a basket case (i.e., a failed state) and probably needs some kind of debt rescheduling (also known as default) before it can stabilize. Portugal has a better track record in these matters, according to the IMF, but there are no guarantees in life. Spain is a big question mark -- and a big problem if it can't rise to the occasion.
The strong countries of Europe had their moment, and they came up with a creative, if overdue, contribution toward resolving the crisis. Now is the time for the weaker countries to demonstrate that they deserve to be taken seriously as well-governed states.