Don Murray: Is there any safe port in the euro storm?

A German banker alights at Athens airport. "Occupation?" the immigration officer asks. "No," the response comes, "just visiting."

It's a bad joke, and a bitter one, calling up echoes of the Nazi occupation of Greece during the Second World War while reflecting the Greek anger at what is seen as German-imposed austerity.

The jibe also embodies a cruel irony. The situation in Greece, expressed in street violence and raucous, inconclusive elections, is provoking such fear among Europe's haves that German tourists are now cancelling their planned Greek beach vacations in the thousands.

In the weeks after the May 6 election, which saw the collapse of Greece's two main parties and the rise of far-right and left parties denouncing the austerity measures, more than 50,000 vacation bookings were cancelled, mostly by Germans.

For the Greeks, that means a key source of their national income is drying up, at a time when the country is desperate and euros are flowing out of Greek banks in rivers.

With the second, deciding Greek election vote only two weeks away — and a tormented Europe hanging on the results —even the head of the European Central Bank, Mario Draghi, was moved to say last week that the euro currency union was "unsustainable."

Though maybe he was just passing the buck.

Eurovision

Here's another joke, almost as bitter as the first. Europe has just taken time out from its economic woes to stage the Eurovision song contest, which pits singers and groups from 42 countries in an often risible and kitschy competition watched by hundreds of millions.

Spain's contestant, Pastora Soler, arrived in Baku, Azerbaijan, (last year's winner and site of this year's contest) with a desperate intention not to win. "If we won, I think it would be impossible to stage the next edition because it costs so much money," she said.

Spain is in deep recession with 25 per cent official unemployment.

As if to confirm Soler's grim prognosis, two days after the contest, shares in Spain's third-biggest bank, Bankia, plunged by more than a fifth.

The bank had just asked for a new government bailout of almost $25 billion. Two weeks earlier it had asked for, and received, a first bailout of more than $5 billion.

It is awash in toxic debt after loaning recklessly during the country's mad property bubble. Already money is seeping out of Spain's banks, as well as Italy's, as investors look for safer havens.

Thankfully, for future recording artists, a Swedish singer won the Eurovision contest. Perhaps not coincidentally, Sweden isn't in the eurozone and can apparently afford to stage next year's extravaganza.

A referendum on the euro

For North Americans who remember the U.S. financial meltdown of four years ago, you can think of Greece as the Lehman Brothers of this crisis.

Lehman's was judged small enough to be allowed to fail by the American political and financial establishment in 2008. But the result of that decision was a massive economic heart attack that almost killed huge banks in the U.S. and Britain.

Still, Europe's fiscal doctors seem curiously unworried by the prospect of governmental coronaries here.

German Chancellor Angela Merkel continues to preach the virtues of the archetypal housewife from Swabia who only buys what she can afford and never goes into debt.

The message here is that the Greeks must stick to their punitive austerity program (and become more like Germans), as the Irish ostensibly did when they voted in favour of the EU's budget discipline rules in a plebiscite last Thursday.

The head of the International Monetary Fund, Christine Lagarde, says she reserves her sympathy for poor Africans. In effect, she is saying the Greeks should stop whining and start paying their taxes.

The result is that Syriza, the upstart left-wing party that categorically denounces the austerity measures and says it will call Germany's bluff, is vying for first place in the June 17 run-off vote with the pro-bailout New Democracy party.

The two have been going back and forth in the latest polls all last week.

At stake are the extra 50 seats (in a 300-seat legislature) that the first-place winner gets in the run-off round. At issue is whether Greece ends up being forced out of the euro, should it decide it really does want to negotiate new terms.

The German Gulliver

It's possible to see Europe's postwar history as a succession of barriers — a blockade, a wall and then a firewall — erected and breached, with Germany at the heart of each of these episodes.

The blockade was of West Berlin in 1948, imposed by Stalin to force the Western allies to abandon their part of the city to East Germany. It was breached by the Berlin airlift, flights day and night to bring food and supplies to the Western sector, and after 10 months Stalin gave up.

The wall was put up in 1961, decreed again by Moscow. It split Berlin and Germany, indeed all of Europe, between a socialist East and a capitalist West. The wall was breached in 1989 and Germany unified a year later.

The firewall was the creation of the euro itself.

A common currency was France's answer to the growing clout that Germany would have as a unified country of some 80 million people.

France's president François Mitterand was incandescent at the unilateral announcement by West German chancellor Helmut Kohl to unify the country after the fall of the Berlin Wall. (Mitterand's advisers remember him having "a little fit of rage that went on for hours.")

Mitterand called in the German foreign minister and told him that France's price for not blocking a unified Germany was agreement on what would be called the euro. The Maastricht treaty was signed just over two years later in 1992.

The goal was political: to bind the powerful German Gulliver tightly to its Lilliputian neighbours with the threads of a common currency.

Now, like the blockade and the wall before it, the fiscal firewall appears about to be breached as well.

No return

Today, as catastrophe looms, a new French president is calling on Germany to change course, to go for growth, to accept a common pool of "eurobonds" as a first step on the road to fiscal union.

Eurobonds would effectively mean that Germany would be underwriting almost all of Europe's new borrowings.

But unlike German chancellors from the 1950s to the 1990s, Merkel sees Europe as a marriage of reason over passion.

Her voters don't want to bail out Greece, let alone Spain or Italy, which have also seen their borrowing rates rise again to desperate levels in these last weeks of Greek uncertainty.

Rather than eurobonds, German voters like German bonds, like the two-year ones the German government recently issued that offer zero per cent interest.

You read that right. And investors are buying them, willing to take a loss with inflation, so desperate are they for safety in the euro storm.

Buy German bonds and lose money. No joke. But for the euro — and possibly the Greeks — an ominous portent.