EU needs stronger economic and currency union

Europe is facing its toughest test ever. The debt crisis brutally revealed all the cracks in the economic and monetary union: the decade-long accumulation of public debt and the lack of competitiveness of some national economies as well as shortcomings of the European treaties.

Despite the European Union's most strenuous efforts, it has not yet won back the confidence of financial markets. Whatever happens in Europe will inevitably also affect the wider world and the EU's trading partners, such as Singapore, India, China.

There are forces which are betting on breaking up the eurozone. What would that actually mean?

The eurozone is the economic backbone of the European Union. Its stability directly affects non-euro states and global financial markets. An erosion of the eurozone would jeopardize Europe as a political project, and with it the chance to make our values and interests be heard in the new power set-up of the 21st century.

Stabilizing the eurozone is in the interest of all 27 EU member states, not least the UK, with its extremely close economic ties. Time to find a solution is running out fast. Three things need to be done urgently if people and markets are to regain confidence in Europe.

The first is to tackle the immediate crisis. Greece's government must without further delay adopt and implement the necessary reforms. Just as urgently, states and banks need protection from contagion.