A blueprint for Germany to save the eurozone For almost 60 years, Germans have maintained that it is their responsibility to participate in a modern Europe. Today, Germany's responsibility is to lead in saving that Europe. This shift is not easy for Germans, who have often been urged to step forward, only then to be criticised for aggressiveness. But no other country can lead Europe out of crisis and into revival. Europe has stumbled from one partial solution to another, buying time without solving the interconnected problems of sovereign debt, banks and competitiveness. Germany has recently urged a fiscal pact as part of a renovated European project. Chancellor Angela Merkel knows that while Germans do not want to waste money, they are deeply committed to their European identity and will offer support if presented with an achievable plan. Combined with new governments pushing fiscal discipline and structural reform in Italy and Spain, as well as support from the European Central Bank, Ms Merkel's new direction has improved prospects. But these steps are not enough. Risks abound. Italy, Spain and others will find it much harder to make fiscal and structural reforms without growth. What will happen to prime minister Mario Monti's political support if Italy does not see results? And what are the costs of a eurozone breakdown if seemingly precipitated by German "austerity" policies? Germany needs to expand its proposal for a fiscal pact into a plan that offers incentives and support to countries that translate words into action. Germany cannot and should not save countries if they do not act to save themselves, but it can assist reformers to sustain political support. Rather than be dragged grudgingly to help bit-by-bit at the last moment, Germany and its European partners should put incentives on the table now. What might a revival plan look like? Mario Draghi, ECB president, knows the central bank cannot bail out countries that have lost control of their finances. But he can assist reforming countries and their banks through the transition. Germany seems to be accepting this support already by stating that politicians should not criticise the ECB. Central-bank assistance is also likely to lead to a depreciation of the euro, which could help stressed countries. The European Commission, backed by the European Investment Bank, should deploy underutilised funds to match investments to countries" structural reforms. European businesses could then support this through private investment. These steps would enable reformers to show how structural changes produce jobs and financing. A revival plan would also embrace the fact that a fiscal union needs greater mobility of workers. Labour policies have been oriented towards old protections, not matching abilities and needs across the EU. Focusing the Commission on this new mission would ease unemployment, increase remittances and build a real economic union. These steps would offer modest support as budgets tighten and protected markets open. But the success of reform governments and the eurozone depends on a bolder incentive. Some have suggested eurobonds or bigger funds. Consider a more targeted idea, from Alexander Hamilton, which is more consistent with Germany's aim of combining fiscal union with discipline. As the new US Treasury secretary, Hamilton assumed the revolutionary war debts of the US states - but only once. After that, states" debts have been subject to market discipline. US states can - and did - default. Germany's aim should be to keep eurozone states subject to market discipline, on top of the procedures of a fiscal pact. However, as an incentive to sustain reforms, Germany could propose a eurobond to fund some share of past debts - but only if deeds matched words. Germany also needs a vision that extends beyond the eurozone. It should prepare a path for Poland to join the euro, keep the UK as an active participant, avoid disputes over secondary issues and prevent a credit crisis in south-east Europe. There is no simple solution to the eurozone crisis. But muddling through, without clear directions and incentives, is fraught with mounting dangers. Germany must now point the way. A clear revival plan would help. But the path and incentives need to match Europe's capabilities, not just Germany's. That is European leadership. The writer is World Bank president