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the checkbook is not the ultimate power in the galaxy. The ultimate power comes from the law backed by a gun.

Americans fought the bloodiest war in their history from 1861 to 1865 over the issue of central power versus local power.

Northern Europe is composed of advanced technocratic economies, made possible by the capital-generating capacity of the well-watered North European Plain and its many navigable rivers

a people that identifies with its brethren throughout the river valleys and in other areas linked by what is typically omnipresent infrastructure. This crafts a firm identity at the national level rather than local level and assists with mass-mobilization strategies.

Southern Europe, in comparison, suffers from an arid, rugged topography and lack of navigable rivers.

identity is more localized; southern Europeans tend to be more concerned with family and town than nation, since they do not benefit from easy transport options or the regular contact that northern Europeans take for granted.

southern European economies are highly dependent upon a weak currency

While states of this grouping often plan together for EU summits, in reality the only thing they have in common is a half-century of lost ground to recover, and they need as much capital as can be made available.

European Union is now made up of 27 different nationalities

The ECB’s primary (and only partially stated) mission is to foster long-term stable growth in the eurozone’s largest economy — Germany — working from the theory that what is good for the continent’s economic engine is good for Europe.

Smaller, poorer economies are more volatile, since even tiny changes in the international environment can send them through either the floor or the roof.

The question is not “whither the euro” but how to provide a safety net for the euro’s less desirable, debt-related aftereffects.

The second is that the Dec. 16 agreement is only an agreement in principle.

First, when a bailout is required, it is clearly because something has gone terribly wrong.

The third complication is that the bailout mechanism is actually only half the plan. The other half is to allow states to at least partially default on their debt

tates that just squeaked by in 2010 must run a more difficult gauntlet in 2011 — particularly if they depend heavily on foreign investors for funding their budget deficits.

STRATFOR has always doubted the euro would last. Having the same currency and monetary policy for rich, technocratic, capital-intensive economies like Germany as for poor, agrarian/manufacturing economies like Spain always seemed like asking for problems.

The resulting government debt load in Greece — which now exceeds annual Greek gross domestic product — will probably result in either a default (triggered by efforts to maintain such programs) or a social revolution (triggered by an effort to cut such programs). It is entirely possible that both will happen.

German Finance Minister Wolfgang Schauble on March 13 in which he essentially said that if Greece, or any other eurozone member, could not right their finances, they should be ejected from the eurozone. This really got our attention.

Back-of-the-envelope math indicates that in the past decade, Germany has gained roughly a 25 percent cost advantage over Club Med.

The implications of this are difficult to overstate. If the euro is essentially gutting the European — and again to a greater extent the Club Med — economic base, then Germany is achieving by stealth what it failed to achieve in the past thousand years of intra-European struggles.

It is not so much that STRATFOR now sees the euro as workable in the long run — we still don’t — it’s more that our assessment of the euro is shifting from the belief that it was a straightjacket for Germany to the belief that it is Germany’s springboard.

But this was not the “union” the rest of Europe signed up for — it is the Mitteleuropa that the rest of Europe will remember well.

The French government understood that the only way to achieve lasting and sustainable economic growth in France was by ensuring a stable peace with Germany.

Its immediate goal was to create a customs union, which would eliminate trade restrictions between member states and establish a common external tariff for trade with the rest of the world.

It would also seek the consolidation of a common market, to allow the free movement of people, goods, capital and services.

Finally, it would seek the progressive coordination of social and fiscal policies among its members.

The rationale behind the European Communities was that if countries gave up sovereignty in specific areas, over time a greater amount of national prerogatives would be transferred to the supranational institutions.

In other words, the process of European integration would progressively weaken the nation-state and its strategic interests.

However, the remarkable growth of the European project did not bring about the abolishment of the nation-state that many analysts predicted.

EU institutions tend to generate their own agendas, which often go against the national strategies of some member states. As a result, the clash between national and supranational interests is often unavoidable.

This friction did not begin with the current economic crisis. In 1965, the French government withdrew its representation in the European Commission in protest of a plan that would give more power to Brussels in the management of the Common Agricultural Policy. To resolve the crisis, the Europeans reached an agreement under which a de facto veto power was given to member states on issues that were considered crucial to national interests. This agreement (commonly known as the Luxembourg Compromise) was designed to protect the intergovernmental nature of the European Communities and virtually froze the process of supranational integration in the 1970s and 1980s, until the Single European Act in 1986 introduced new mechanisms for qualified majority voting.

On top of the traditional tensions between national governments and supranational institutions, in times of crisis member states also tend to distrust each other.

Governments must find a balance between their foreign policy objectives, pressure from the European Union and their desire to be re-elected -- which means decisions that may make sense for the future of the European Union (such as fiscal consolidation efforts) would probably not be made if governments consider them too unpopular among voters.

Other institutions, such as constitutional courts, often threaten to block decisions accepted by national parliaments. The recent investigation by the German constitutional court on the validity of the European Stability Mechanism and the decision by the Portuguese constitutional court to block some austerity measures promoted by Brussels and implemented by Lisbon are examples of this situation.

The deep unemployment crisis in the eurozone adds yet another complication to this problem. The European elites are still largely pro-European, and most of the voters in the eurozone want to keep the euro. But with the European Union's promise of economic prosperity weakening, its members have begun to rethink their strategies. Fidelity for the European project is not unbreakable. Nor is it strong enough to support an indefinite period of extremely high unemployment.

Non-eurozone countries in Central and Eastern Europe have also begun to think of a more independent foreign policy. They remain formally aligned with the European Union and NATO, but the pursuit of closer ties with Russia is no longer taboo. And for most of them, joining the eurozone is no longer a priority.

Like most economies in Mediterranean Europe, France's has lost competitiveness since the creation of the euro, and the common currency has led to a constant trade deficit with Germany. France will seek to change its relationship with Germany without breaking it (as Paris is still interested in containing Berlin), but Paris is increasingly aware that the European project should be remodeled.

The Germans are interested in preserving their alliance with France and protecting the currency union because it benefits its exports to its neighbors and out of fear of the immeasurable financial consequences of a breakup of the eurozone.

Europe's main challenge will be to prevent these frictions from paralyzing the bloc. The European Union will also face the test of mitigating the alienation of its eastern members and closing the gap between eurozone and non-eurozone countries. In the meantime, Brussels and national governments will have to find ways to alleviate the bloc's corrosive unemployment crisis before it leads to dangerous levels of social unrest. In all these challenges, the European Union is running a race against time.

The chancellor reaffirmed Germany’s Christian identity, stressing that “whoever wants to live here must learn German … (and) obey our laws,”

Merkel warned that Germany’s place as a global economic powerhouse was not assured or preordained

Germany is ascending to what it feels is its rightful place as a global power, if not one of the world’s true superpowers

This means both that Germany is firing at all cylinders and that it is relatively unimpeded by expenditures on youth and the elderly. Within a decade, however, Germany will see its productive age groups begin to retire, reducing its output and increasing burdens on the state.

Germany’s post-Cold War generation, born in the 1990s and psychologically unencumbered by Germany’s WWII experience, will also come to power at this moment.

southern Europe lacks a single river useful for commerce. Consequently, Northern Europe is more urban, industrial and technocratic while Southern Europe tends to be more rural, agricultural and capital-poor.

For centuries, Europe was home to feuding empires and states. After World War II, it became the home of devastated peoples whose security was the responsibility of the United States.

To join the eurozone, a country must abide by rigorous “convergence criteria” designed to synchronize the economy of the acceding country with Germany’s economy.

Germany would therefore not be leaving the eurozone to save its economy or extricate itself from its own debts, but rather to avoid the financial burden of supporting the Club Med economies and their ability to service their 3 trillion euro mountain of debt.

Germany could reintroduce its national currency with far more ease than other eurozone members could.

German banks own much of the debt issued by Club Med, which would likely default on repayment in the event Germany parted with the euro.

Athens could ease its financing problems substantially.

the first thing the Greeks will want to do is withdraw all funds from any institution where their wealth would be at risk

The resulting conundrum is one in which reconstitution of the eurozone may make sense at some point down the line. But the interlinked web of economic, political, legal and institutional relationships makes this nearly impossible. The cost of exit is prohibitively high, regardless of whether it makes sense.

the eurozone has thus far been exceedingly economically beneficial to Germany. Berlin’s 151 billion euro contribution to the two bailout funds pales in comparison to the overall boost in exports that Berlin has received since forging the eurozone.

A collapse of a currency — such as those in Germany in 1923, Yugoslavia in 1994, and Zimbabwe in 2008 — is really just a symptom of the underlying deterioration of the political system and is usually followed closely by exactly such a political crisis.

The immediacy of the crisis is the impetus for such radical changes to Europe’s “economic governance.” French President Nicolas Sarkozy actually proposed something similar in the wake of the September 2008 crisis, but Berlin sternly rejected him at the time. The crisis that has followed, however, has changed Germany’s mind.

The bottom line is that Germany and other member states are shelling out cash and breaking EU treaties because it is in their national interests to do so at this particular moment. If they are to institutionalize such rules for the long term, it is inevitable that they will be broken once national interests revert back to the standard concerns of sovereignty over fiscal policy.

Once Germany has paid for its leadership of Europe, will it also be willing to enforce its leadership with direct punitive actions? And if it does, how will its neighbors react?

even at the height of the economic crisis, Europeans are thinking of a future when they will want to go back to less rigid interpretations of fiscal rules.

recent elections across the Continent have illustrated how politics — specifically getting elected — are still the most important motivating facto

If even one member state faces a domestic political calculus arrayed against integration, the entire effort could be thrown off course.

Satellite data collected since 1979 shows that both the thickness of the ice in the Arctic and range of sea ice have decreased substantially, especially during the summer months.

U.S. Geological Survey estimates from 2008 suggest that 13 percent of the world's undiscovered oil and 30 percent of undiscovered natural gas reserves are located in the Arctic Circle.

In 2012, 46 ships transporting a total of 1.3 million tons reportedly used the Northern Sea Route, which runs along the northern coast of Russia; this represents a considerable increase from 2011, when 34 ships transported approximately 820,000 tons. In response to the route's growing importance, Russia set up the Northern Sea Route administration in March to supervise shipping.

Europe has a vested interest in alternative shipping routes to Asia becoming more economically viable, since such routes would allow trade to circumvent numerous bottlenecks like the Suez Canal and increase access to Asia's growing consumer markets.

 China has also shown a particular interest in the Arctic, and has lobbied the Nordic countries to support Beijing's bid for observer status in the Arctic Council.

Sailing along the Northern Sea Route rather than through the Mediterranean Sea and Suez Canal significantly reduces the trip between Rotterdam and Shanghai -- the Northern Sea Route is around 20 percent shorter. This translates into significant savings in terms of fuel and crew costs.

The Arctic Council is just one of many bodies dealing with regional collaboration in the Arctic. The Barents Euro-Arctic Council, the Nordic Council and the Conference of Parliamentarians of the Arctic Region also coordinate intergovernmental or interregional collaboration in the Arctic on a number of issues.

On May 10, the U.S. government presented its new general strategy for the Arctic. Little concrete information was revealed, but a clearer plan for implementing the strategy reportedly will be worked out in the coming months.

People will be puzzled at what they find when they open the time capsule, said Rauber. “In 25 years people will be astonished to see how little time must pass to render data carriers unusable because they break or because you don’t have the devices anymore,” he said. “The second shock will probably be what fraction of the objects we can’t use or access in 25 years and that’s hard to predict.”

The ultimate problem for Germany is that the moment the rest of Europe perceives that Berlin is looking out solely for its own national interests — such as when it refuses to put up money to save a eurozone member state — it ceases to be a viable European leader.

But the clock is ticking, and Europe’s demographic challenges are right around the corner. At that point, all of Europe will be so embroiled in domestic political, economic and social concerns that settling issues of leadership and power will be impossible, and that is if the EU even survives the coming crisis.

First, the terms are normally onerous.

Second, a bailout is only appropriate if the entity that you’re bailing out can’t in time repair its finances and get back in working order.

First, the conditions of the European Financial Stability Fund, the ESFS, that’s the bailout program, are really not all that tough.

Second, many of the states under bailout or who have been flirting with bailouts simply do not have long-term income potential.

the Germans simply have not wanted to permanently take on responsibility for these weak states that can’t grow on their own.

First, the ESFS no longer has to go back the Council of Ministers to get permission for a bailout

Second, the ESFS can really take any action it deems fit.

First is why did Germany change its mind?

Finally, European banks are some of the most unhealthy in the world

In contrast, most of Germany is flat.

The lack of any real physical borders to the east and west also helps explain Germany's historical conflict with its neighbors.

Greece is a rugged country with narrow coastal plains that swiftly give way to mountains.

Greece's extremely fragmented geography and its strategic position on the eastern Mediterranean helps explain why it has struggled throughout history to get anything done.

Whenever I'm in a foreign country, I make an effort to visit bookstores because the books people read and write offer insights into the social mood.

In an Oporto bookstore, among the bestsellers was a book called We Are Not Germans, while a Rome bookstore had a book called It's Not Worth a Lira, a plea to leave the euro and return to Italy's old currency, that appeared to be quite popular.

While conservative forces are moving to the right and nationalist forces are gaining strength, the center-left is going through an identity crisis that is generating frictions within the parties and confusing their traditional voters

The irony is that the same process that is creating political and social tensions in Europe's core is helping to mitigate the negative effects of a demographic change.

Poland was a country confident about its economic strength but worried about its future. History has given the Poles a deep understanding of geopolitics and too many reasons to be worried about the events beyond their borders.

. The crisis has now reached a point where its two main players are under extreme pressure. Germany joined the eurozone under the assumption that no bailouts would be given to nations in distress and no monetization of debt would take place. France joined the eurozone under the assumption that it would remain the political leader of Europe. The crisis has put all the promises and agreements that supported the Franco-German unity in doubt.

Europeanists believe that things would be much better if the European Union became a true federation. They are probably right. The question is how to accomplish this.