Here’s how it was supposed to go: Greece first. Then, perhaps, Portugal and Ireland. If things got really bad, Spain. If the world -- or, more precisely, the euro -- was coming to an end, Italy. It was not supposed to go Greece and then Italy. No one was prepared for that. The markets weren’t prepared for that.

(Petros Giannakouris/ASSOCIATED PRESS)

The problem, put simply, is that Italy is both too big to fail and too big to save. It’s the eighth-largest economy in the world. At $2 trillion, it’s about seven times as large as Greece’s $300 billion economy. France and Germany’s banks alone have $600 billion in exposure to Italian debt. But Barclay’s says Italy is “now mathematically beyond the point of no return.” Silvio Berlusconi might be out, but changing governments does not change arithmetic. And so the question is simple, and stark: If there wasn’t the will to really save Greece, where would the will -- and the money -- come from to save Italy?

The answer that’s so troubling the markets right now is that it perhaps won’t come at all. Market participants and commentators are increasingly thinking the unthinkable: Perhaps this really is the end of the euro. “If policymakers had understood two decades ago what they know now,” writes Martin Wolf in the Financial Times, “they would never have launched the single currency. Only fear of the consequences of a break-up is now keeping it together. The question is whether that will be enough. I suspect the answer is, no.”

Paul Krugman put it more piquantly. “This is the way the euro ends. Not with a bang but with bunga-bunga.”

The problem is that if Italy can’t be saved, there’s no real point in saving Greece. Greece knows it and France and Germany know it. So the moment it becomes clear that the euro zone can’t hold, it ceases to make sense for Greece’s politicians to implement unpopular austerity measures or for Germany’s politicians to back unpopular bailouts. At that point, the question is no longer how to save the euro zone, but how to manage its dissolution. And no one really knows what that will look like, or whether it can be done well. Which is why the markets are so terrified.

The only thing standing between the euro zone and total dissolution is the European Central Bank. But it’s not quite right to say the bank is standing there. Rather, it’s standing off to the side somewhere. But the markets still hold out some hope that the ECB will step in.

As Alexander Friedman, the chief investment officer of UBS, wrote in the Financial Times, “The European Central Bank, now led by Mario Draghi, must accept its role as the lender of last resort in Europe. The ECB could stop the panic engulfing Italian and Spanish government bond markets, and it is the only institution in the world with this power. To do this, it should promise an unlimited liquidity backstop to sovereign bond markets of solvent nations.”

But a week ago, in his first news conference, Draghi dismissed the ECB’s role as lender of last resort. “I don’t really see that as the remit of the ECB. The remit of the ECB is price stability over the medium term,” he said.

There’s still hope that the ECB might change its mind. But if they don’t, there’s little hope for the euro zone to survive.