Europe's future: division or unity?

But simply creating stricter rules to enforce discipline will not solve the problem, a new study by analysts at the CER claims. In a report published today Simon Tilford and Philip Whyte argue that the crisis not a result of the "errant behaviour" of a few countries and that monetary union held together by a set of rules rather than full fiscal union is "deeply unstable". They write: "The eurozone will remain an unstable, crisis-prone arrangement unless critical steps are taken to place it on a more sustainable institutional footing. But it is equally clear that European politicians have no democratic mandate in the short term to take the steps required. "The reason is that greater fiscal integration would turn the eurozone into the very thing that politicians said it would never be: a transfer union, with joint debt issuance and greater control from the centre over tax and spending policy in the member-states." Maintaining the "fiction that confidence can be restored by the adoption and enforcement of tougher rules" will "condemn the eurozone to self-defeating policies," they warn. Instead some rules should be broken in the short-term, they argue, allowing the European Central Bank to buy as much Spanish and Italian debt as necessary – so far it has made only limited bond purchases to control bond yields.