Italy yesterday raised the stakes for the future of the euro by warning there is just one week to save the single currency. Its prime minister Mario Monti painted an apocalyptic picture of what would follow if EU leaders failed to deal with the debt crisis at a summit of all 27 states in Brussels next week.

New fears have emerged that the eurozone’s biggest economy Germany could be slipping into recession which would be a blow to saving the single currency.

A key measure of German business optimism fell this month by more than market analysts had expected. Earlier this week, a separate survey indicated that Germany’s manufacturing sector was also slowing down. Weaker economic conditions could undermine its ability and the willingness of its already resentful public to help their debt-laden eurozone partners.

Leaders at next week’s summit will seek to focus on growth and jobs as well as sending out signals of unity in a bid to stabilize the eurozone.

Nicknamed “super Mario”, Mr Monti warned failure to tackle the crisis would lead to “progressively greater speculative attacks on individual countries, with harassment of the weaker countries”.

These would focus not only on those who had failed to respect EU guidelines but also on those like Italy, he insisted, which had stuck to the rules “but which carry with them from a past a high debt”.

He added: “A large part of Europe would find itself having to put up with very high interest rates that would then impact on the states and also indirectly on firms. This is the direct opposite of what is needed for economic growth.”

Faced with that problem, “the frustration of the public towards Europe would grow” and turn against the integration he said was needed for the eurozone crisis to be resolved.

He hosted talks in Rome yesterday with the leaders of Spain, Germany and France, where German Chancellor Angela Merkel still resisted pressure to issue eurobonds.

Asked by a Spanish journalist why Germany could not simply direct bail-out cash to Spain’s struggling banks, she said she could not hand over money when she had no ability to control their activities.

On Thursday International Monetary Fund chief Christine Lagarde demanded rapid progress on banking union, fiscal union and debt sharing.

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Editor's Note: IMF Chief Lagarde's call for an expansion of sovereignty killing financial authority will throw gasoline on to this fire. The fact that each nation's financial sovereignties are, today, interconnected, is a prime reason why healthy nations are being affected by spendthrift Socialist nations. Think about it...


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