The danger of a euro crisis is increasing; it may prompt more political integration, not less.The signalling is coming not from the foreign-exchange market (the euro has climbed back from its October low against the dollar) but from the bond markets. Spreads on the ten-year government debt of Greece, Ireland, Italy, Portugal and Spain over that of Germany have widened sharply. Rating agencies are paying particularly close attention to the fiscal positions of the profligate five: Standard & Poor’s has downgraded three of them and put another on credit watch.

That need not imply a straightforward bail-out. But it does suggest the euro area might need an equivalent of the International Monetary Fund’s rescue packages. It would imply both a bigger role for the centre and more intrusive monitoring of euro members’ budgets. Far from fulfilling the eurosceptics’ dream of kiboshing the entire European project, a crisis could thus lead to even deeper political integration. That is a guess. But some form of euro drama looks ever more likely—and it would be better if governments started preparing for it now.

Dear Governments get ready for that !!!