As leader of the effort to defuse the threat that Greece's runaway debt poses to the euro, the German chancellor has few if any good choices
LET GREECE SINK
Leave the Greeks to right their budget on their own, or slide into default if they can't.
Pros: This move would score big points among German voters.
Cons: It could knock the euro down even more as bond traders attack other weak countries in the euro zone with renewed vigor.
After a month or so to cool the markets and give the Greeks a chance to make cuts, extend German or Franco-German aid to Athens.
Pros: It would patch up the euro.
Cons: Given the Greeks' track record on spending, the chances of long-term fiscal probity are low—which means another crisis would be inevitable, unless Germany plays the heavy and insists on close monitoring.
PHONE UP THE IMF
The International Monetary Fund knows how to straighten out a wayward country's finances and is used to being attacked for its stinginess.
Pros: The IMF would probably get the job done, and Germany would not be blamed for the pain inflicted.
Cons: The EU could balk at the idea, since an IMF bailout would signal that Europe can't take care of its own. And French President Sarkozy isn't keen on publicity for the IMF chief, a French political rival.