BAILOUT HEADACHES: Eurogroup President Jean-Claude Juncker (right) talks with Jean-Claude Trichet, President of the European Central Bank, during an informal meeting of EU finance ministers in Hungary on April 8 (XINHUA)

Even among the countries receiving bailouts, the causal factors for their economic woes vary and require different solutions. Greece ran large structural deficits and engaged in misreporting of economic data to stay within euro-zone requirements, eventually crumbling under overwhelming debt. Ireland lapsed into dire straits when it had to bail out its over-leveraged banking sector, which was hit by the collapse of the real estate market in the wake of the financial crisis. Portugal has long been lingering in economic doldrums due to general lack of competitiveness and governmental irresponsibility.

Third, the EU debt crisis has undermined confidence in the EU mechanism, and has far-reaching consequences extending beyond the economic sphere. The disproportionate burden shouldered by member states due to the imprudence of other member states casts doubts on whether further integration in other domains is indeed beneficial and desirable. The debt crisis has underscored fact that the euro zone as a whole has been forced to assume responsibility for the failings of individual member states that have not demonstrated their resolve to put their internal politics in order.

Due to the strength of opposition parties, Portugal's parliament resolutely rejected the austerity program the European Commission and the ECB endorsed. Despite having benefited greatly from EU membership, Ireland initially voted against the Lisbon Treaty, an amended version of an aborted EU Constitution, and yet now is relying on an EU bailout. Ireland has also refused to increase its corporate tax rate, against the recommendations of the EU.

There is also skepticism among EU member states on the interpretation of the Lisbon Treaty, as the EU bailout of Greece and Ireland was justified using Article 122 of the treaty governing the European Monetary Union which states if a member state is "in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control," the EU may grant financial assistance to the member state concerned. There has been much controversy over whether fiscal irresponsibility counts as "exceptional occurrences beyond its control."

Despite these concerns, there remains hope the EU might emerge battered but intact from the crisis. The sovereign debt crisis has showcased France and Germany's commitment and resolve to safeguard the euro. The lending capacity of the EFSF is enough to fund a Portuguese bailout, and it is part of a buffer also including funds from the European Commission and the International Monetary Fund. Even in the event of another major bailout or new demands from current recipients, it is likely the EFSF will be able to cover them, though not without significant strain and unpopularity.

The European Commission has indicated the Portuguese aid request will be dealt with "in the swiftest possible manner," and unlike the bailouts of Greece and Ireland, there has been no new wave of panic, as markets had been primed for a Portuguese bailout and were already behaving in anticipation of it. EU leaders have started to address worries about the euro zone's fiscal soundness, and market distrust of debt, and appear to be moving closer to trying to find a eurozone-wide solution, rather than merely firefighting and passively bailing member states one after another.

The very origin of the EU was built on a foundation of overcoming crises. It has time and again proven its mettle at overcoming the odds. Should the EU tide over this crisis and use it as an opportunity to address structural gaps in the euro zone, adopt necessary financial reforms, and undertake greater political coordination and institutionalization, it will gain greater credibility in the process, or at least not negate the laudable progress it has made in the past five decades.

The author is an associate fellow with Chatham House, London

(Viewpoints in this article do not necessarily represent those of Beijing Review)