The European Union and Greece are down to the wire once more. The bailout measures for Greece are set to expire on June 30, and that is also the day that Greece must repay €1.54 billion to the International Monetary Fund. Leaders around Europe seem to be reconciling themselves to some sort of "Grexit," an abandonment of Greece to the drachma.

A Grexit may make financial sense for Greece, though the short-term economic shock will be extraordinary. But it will also inflict a major blow to the great European project of the post-communism era, which rests on the principles of ever-greater integration and cooperation. It didn't have to be this way.

You may recall that Greece has been here before, in 2013, when it received bailouts and financed its debt. Back then, it was feared that a Grexit could spread financial contagion across the continent, detonating fragile financial institutions in Portugal and Ireland and even threatening Spain, Italy, and France.

Now Europe is not nearly as afraid of a Grexit, and the political pressure on Chancellor Angela Merkel in Germany to remain tough with Greek "clowns" is on a collision course with the political pressure on Alexis Tspiras, the left-wing leader of Greece, to make good on his promises to end austerity.

In the past few years Greece has enacted through legislative policy the experience of a major currency devaluation without an actual currency devaluation: years of 20 percent unemployment, a drastic reduction in the standard of living (including an over 25 percent reduction in food consumption), dramatic cuts in pensions and public spending — all with increased taxation. Understandably, Greece is fed up. But Germany's view of the situation is that Greece's public institutions are flabby and corrupt, making them the welfare queens of Europe. And the economic turnaround in Ireland encourages Western European leaders to think that cracking the whip on Greece is for its own good.

If the European project is fundamentally a political endeavor, the use of a currency union and a continental central bank has reduced "European" politics to a drab endeavor of neoliberalism. Consequently, once the economic growth slowed or stalled, pro-European parties on the left and right both found themselves extremely vulnerable. Center left-parties like Labour in the U.K. or the Socialists in France found themselves entirely disconnected, culturally, from the working classes. On the right, parties like France's Union for a Popular Movement had ceded the language of patriotism to the euroskeptics. In other words, the European project has been very good at creating solidarity among a cross-national economic elite, but the centrist political parties have abandoned the solidarity that creates lasting right-wing or left-wing coalitions.

Paradoxically, the EU makes the nationalism of smaller states seem possible — look at Scotland or Catalonia. But its unresponsive, undemocratic institutions enflame anti-EU nationalisms from Sweden to Greece. There was the surge of the Danish People's Party in elections last week. Even France now faces a choice between parties discredited by the last decade and the National Front of Marine Le Pen. Britain's euroskeptic UKIP may have won only one seat in Parliament, but it captured far more votes than the Scottish National Party and the Liberal Democrats. A Grexit will only strengthen the arguments of the euroskeptic parties.

Even if the European Union can survive the economic reverberations of a Grexit, it is still a major setback for the European project, which was predicated not just on the promise of making European war unthinkable, but on raising living standards across the continent. In the past decade, the EU has gone from the confidence of demanding repeated national referendums on its expansions of power, and dreaming of incorporating even Turkey into its pact, to throwing out Greece after pushing that nation into financial calamity.

In the United States, cities and states that are net tax contributors aren't hotly resentful of those counties and states that are net revenue receivers. But the EU's financial crisis and the Grexit are an object lesson that the same is not true in Europe. German taxpayers are willing to suffer very little, even if it means that nations on the periphery must suffer tremendously. If Greece leaves, the European project will never have the same momentum or confidence again.