Bold steps needed from leaders to save the euro

There is now a real sense of urgency to find a solution to the crisis paralysing the eurozone, with contagion from the Greek debt situation spreading throughout the continent and lapping at the shores of Italy and Spain. However, the complexity of the problem and conflicting interests of creditor and debtor countries, bondholders, banks and senior politicians are making a difficult situation all the tougher and a comprehensive deal that will stop the wildfires spreading further is realistically the only outcome that will put an end to this crisis, as time and patience runs out. German Chancellor Angela Markel has said she will only attend if there is a measure of private creditor involvement in Greek debt re-structuring, her argument being a familiar one in this country: why should eurozone taxpayers have to pick up the tab while bank investors escape? Unsuccessful and timid rescue efforts have been underway for over three years, ever since some European banks first got into trouble, followed closely by several countries, Ireland included. However, instead of coming together in times of crisis, a cornerstone of European integration, countries have now become divided. In all of this, the stakes are huge. A break-up of the European currency union has gone from being an unthinkable possibility to an ever more realistic scenario. The danger is that the political climate could become so toxic that a threat to the very idea of European unity itself is at stake and this is something the continent's leaders will have to continually have at the forefront of their minds during this week's emergency summit in Brussels. Governments from across the continent are now working at full tilt to prevent such an outcome ahead of their EU summit tomorrow (Thursday). There are still a number of options on the table for the European project to succeed, but they are becoming increasingly limited. And unless Europe's leaders can move faster and further, the current instability may get considerably worse. As botched rescue has followed another failure in this crisis, now is the time for European Union leaders to act convincingly and put in place a plan that will assure the financial markets that the debt issue is coming under control. Financial history is littered with unthinkable outcomes becoming the inevitable with frightening speed, and a collapse of the euro, should no agreement be forthcoming, would bring huge economic costs throughout the eurozone - and Ireland would not be immune from these consequences. But the longer matters remain unresolved, the more debilitating the drain on confidence and on the prospects of recovery. Any suggestion that a weak country could be about to leave the euro would in all likelihood lead to runs on deposits in already weakened banks, possibly resulting in the introduction of capital controls and even limits on ATM withdrawals, something which would further strangle business, not to mention cause enormous problems for households everywhere. Politically, the very fabric of the single market and the EU itself would be in grave danger. With Europe's financial markets in tatters, the preservation of cross-border European trade - something Ireland's export-orientated economy is reliant upon now more than ever - would become extremely difficult. It would be, in short, a nightmare scenario. In every sense, the implications of this crisis are profound. The euro stands as the crowning achievement of the post-war project of European political and economic integration. If this pillar was to fall, Europe would be into completely uncharted territory and the EU's influence as a major power bloc in the world would be severely diminished. European leaders, having already dithered for far too long, will simply have to reconcile competing proposals for a second bailout for Greece that will dominate Thursday's summit but, more importantly, they must explore ways of preventing the fallout from further damaging global markets. A comprehensive rescue plan for the country that will also widen the necessary measures to halt the debt contagion spreading to major economies like Italy and Spain must also be hammered out. Measures to tackle the crisis could end up having positive benefits for Ireland, such as a lower interest rate on our ECB/IMF bailout, longer debt maturities and the possibility of a bond buyback programme, all of which which could translate into a reduced debt burden on this country. Finance Minister Michael Noonan has described any moves which would see Ireland's debt burden being reduced as a significant advance that would improve the country's economic situation. But first, Europe's governments must act in unison.