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Europe's Hopes Hinge On ... Slovakia!

This is what Slovakia's flag looks like.

Petr David Josek/AP hide caption

toggle caption Petr David Josek/AP

Here's a scary headline from the FT:

Slovakia is a small, relatively poor country that's not in any intense financial trouble. It doesn't need a bailout, and it's in no position to provide much of a bailout.

So why is Slovakia suddenly such a big deal? The answer points to a fundamental problem at the heart of Europe's never-ending debt crisis. Solving the problem will require huge, painful changes.

Every euro-zone country except Slovakia has approved the expansion of the EU's bailout fund. Slovakia is voting today. And — here's the key part — all 17 euro zone countries need to approve the expansion.

It would be as if the U.S. were voting on some critical measure, 49 states had approved it, and the whole country was waiting to see which way, say, Louisiana was going to vote.

This lack of central authority has made it basically impossible for European officials to take the kind of bold, quick action necessary to stop the debt crisis in peripheral countries from turning into a full-blown European financial crisis.

It's already clear that the plan Slovakia's voting on today won't be enough; the leaders of France and Germany and the European Central Bank are already talking about what they're going to do next.

This is why lots of Europe watchers say the eurozone either needs to split up — which would be an incredibly wrenching, painful process — or to become more like a single, unified country — which would be an incredibly wrenching, painful process.

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