Andy Langenkamp is a global political analyst at ECR Research, a firm specialised in macroeconomic analysis with a focus on currency developments in the G10 economies.
"The eurozone crisis shows that while the markets, other politicians, and voters may force leaders to take certain actions, they (and their entourage) can really make a difference if they have enough willpower, energy and vision and if they inspire confidence.
In exceptional cases, statesmen can even push back frontiers and open up new horizons. To do so, requires both pragmatism and idealism. Yet it remains to be seen if the present generation of leaders in Europe can hold a candle to Churchill and Kohl and lay the foundations for a European recovery.
Will the problems in Greece and Spain – that will inevitably lead to market speculation against Italy and France – take politicians to a crossroads where they rise to the challenge and enter the history books as the saviours of Europe? Will integration continue, as the markets demand and the crisis requires?
So far, pressure has not been sufficient to enforce a shake-up of the overall governmental structure of Europe. No acute systemic crisis has triggered revolutionary changes (although that moment may be approaching fast). The leaders have gotten away with an incremental approach and they are still quenching local fires instead of erecting a fireproof European edifice.
Now that Spain is about to implode and wildfires threaten to spread across Europe, a fundamental restructuring of the eurozone and the EU may finally be on the cards. Maybe Europe will succeed in saving Spain, but almost inescapably the markets will target Italy next and eventually the same fate will befall France. Once this happens, cautious rescue operations will no longer do the trick. The EMU will have to take giant leaps or the euro is doomed.
On the one hand, leaders will have to move towards further integration simply because they cannot afford to climb down. That road is well and truly blocked by now due to the high degree of intra-eurozone economic interdependence plus fears of the repercussions if the EMU disintegrates.
At the same time, the leaders are increasingly inclined to ignore borders and launch cross-border initiatives. Some of the recent measures would have been unthinkable until four years ago. Many politicians combine a healthy dose of realism with a dash of idealism, which points towards increased collaboration.
The choice to work together is not just born of economic necessity. In the past, the European project has been beneficial in other areas too. Greece, Portugal and Spain experienced a relatively smooth evolution to democracy after years of military dictatorship precisely because of the prospect of joining the EU.
Meanwhile, the downfall of communism was relatively peaceful in part because some of the Eastern European countries were immediately offered an ideal worth striving for, namely EU membership with all the associated social and economic benefits.
Finally, Turkey has made progress in the areas of human rights, minority rights, economic openness etcetera because it wants (or wanted) to become an EU member.
As the Spanish international politician Solana wrote quoting the words of liberal philosopher Ortega y Gasset: "Spain is the problem, Europe the solution."
Many leaders still think the pros of additional integration outweigh the cons. Moreover, they are "trapped" in integration, which is like a speeding train that cannot be brought to an abrupt halt.
In the words of Jean Monnet, yet another European leading light, "People only accept change when they are faced with necessity, and only recognise necessity when a crisis is upon them."
While the Concert of Europe and Bretton Woods emerged as a result of military shocks in Europe, the political, fiscal and banking union will be engendered by economic upheavals. Spain could implode any minute. Once Italy (and perhaps France too) threatens to slide into the abyss, the leaders will most likely choose the 'European way'.
Undoubtedly, this will do the weak eurozone countries a world of good. Whether the strong member states – led by Germany – will come out better, remains to be seen. They could face (much) higher interest rates if the markets see further integration as no more than the transfer of money from North to South without the whole exceeding the sum of its parts.
However, should the politicians manage to strengthen the political and economic fabric the markets will take a positive view. In that case bond yields in the strong EMU countries could rise marginally but this may be offset by much lower long-term interest rates in the weak member states. If so, Europe as a whole – and thereby the euro – might get another lease of life."