And herein lie the problems that we have:
#1: I agree, sort of, with you. 2 weeks of war really isn't that bad. EXCEPT when it will be 2 weeks of war on the nations that would be counted on to provide post-war reparations and help rebuild our alliance. We have no middle ground anymore. We are an alliance of smaller nations that are in no shape to pay reps and larger ones that Karma wants to beat to a pulp for 2 weeks. Also, it involves placing way too much trust in our enemies actually stopping after 2 weeks. I just don't see the karmic blood lust being sated after 2 weeks. If you have that much faith in their "good graces", you Sir are a much more trusting person than I. See #2.
#2: The possibility of missing just one payment, which can and will most probably happen, will nullify everything and we'd be back at square one. I believe most would be understanding and accomodating, yet I know there will be those people who would cry out for more blood. Those people would be the ones who would override the merciful ones. (see the last 2 sentences in #1)
#3: Is Sparta volunteering to be the protector? Can we trust you? Can we?
#4: Seems to be contradictory. You say the no treaty thing is an empty term. Then you say "If it did work, stopping an alliance from making outside relationships is a greater intrusion than a couple weeks of war". I submit it would be a better term than the extra 2 weeks of war. Power in CN is not just derived from a single alliance. Power is a combination of one's alliance and its allies. Sure, we can't be silenced from talking to people, but we'd have no way to effect anything diplomatically. It would severely hamstring us for 1 year putting us way behind the rest of Planet Bob.
edit: mispelled word in last paragraph