By Howard Schneider

ATHENS — The massive emergency fund assembled to defend the value of the euro is backed by a political gamble with an uncertain outcome: that European governments will rewrite a post-World War II social contract that has been generous to workers and retirees but has become increasingly unaffordable for an aging population.

The trillion-dollar program, to be underwritten largely by the 16 nations that use the euro and by the International Monetary Fund, represents a virtual discarding of Europe’s rule book.

Under the rescue unveiled early Monday, governments that broke the currency union’s spending restrictions are being offered a commitment of solidarity, with weak links such as Greece and Portugal supported by the creditworthiness of Germany’s strong economy.

The European Central Bank will act as a bond broker of last resort for troubled European governments, a role so distant from its conservative, inflation-fighting personality that Jean-Claude Trichet, the bank’s president, emphasized that the ECB remained “fiercely and totally independent” of political concerns.

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By STEPHEN FIDLER

A €750 billion ($955 billion) bailout package for euro-zone governments facing debt troubles has created another urgent challenge for European policy makers: how to keep free-spending governments in line.

The rescue funds, together with a commitment from the European Central Bank to buy up governments bonds, have “weakened incentives for fiscal discipline” in the euro zone, says Marco Annunziata, chief economist of UniCredit Group in London.

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By Frank Ahrens

The head of the European Central Bank (ECB) said today that the overall euro area debt-to-GDP ratio could hit the dangerous 100 percent level in coming years if tough measures to reduce spending are not enacted.

This is a pretty big deal and here’s the easiest way to explain why: Right now, debt makes up 48 percent of Finland’s GDP, and Finland’s in pretty good shape, economically. In Greece, debt makes up 125 percent of GDP, and you know what kind of mess the Greeks are in.

The ECB says that everything that’s happening to Greece — default as a nation, basically — can happen to the remaining 15 euro area countries if steps are not taken soon.

In Europe, the same thing happened as happened here: a Great Recession followed by massive amounts of government stimulus to try to keep the ship from sinking, which has led to huge and unsustainable levels of debt.

It’s just like a household: What happens when you run up such a high amount on your credit card that you can only afford to make the minimum payments? Right. It gets ugly.

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