WARNING: The European Union, in a struggle for survival

The European Union is in a "a survival crisis", and its members should act together in order to overcome it, EU president Herman van Rompuy said yesterday, and he stressed that otherwise, the future of the European bloc would be in question.

Van Rompuy said, in an intervention in the European Policy of Brussels: "We are in a survival crisis. We need to act together. If the Eurozone doesn"t survive, then the European Union won"t, either".

The EU official said that the current budget issues of the Eurozone need to be solved through "concerted" action.

However, Van Rompuy expressed his confidence that the current crisis will be overcome.

The financial markets are seeing renewed turbulence due to the concern over the financial state of Ireland, as well that of Portugal, Greece or Spain, countries which are facing extreme budget deficits.

The authorities of Dublin in particular, are being subjected to pressure for accepting a foreign financial aid package, to avoid contagion spreading to the other countries of the Eurozone. But, the Irish officials announced on Monday that they would not request any foreign financial aid, as the country is fully funded until the end of H1 2011.

• The Eurozone will fall like a domino

The Irish crisis will attack Eurozone countries one after another, until the Eurozone gets taken apart, says Matthew Lynn, an editorialist of Bloomberg. He states that the only solution to stop the "dominos" is to split the Eurozone into currency areas, with similar monetary policy areas.

Matthew Lynn notes that even though the crisis seems to have had various causes in each country - a fiscal crisis in Greece, a collapsed banking system in Ireland, a budget deficit in Portugal, a collapse of the real estate market in Spain -, the root of the problems is the same: the Euro, which has become a "bankruptcy machine".

"When the Euro was started, the idea was that using the same currency would help some very different economies converge, allowing the ECB to run a unified monetary policy for all of them. The theory was interested but it was proving wrong", the editorialist said, who adds: "The economies in the region are too different to be managed by a single central bank".

Matthew Lynn concludes that the current crisis will expand from one country to the next and the only solution would be to split the Eurozone into several areas that could be adequately managed.