Survival instinct pushes Europe onwards

As onlookers digest the EU summit agreement, the commentariat has reacted with widespread cynicism to the solutions tabled. Many critics of the single currency have argued the steps taken simply kick the can further down the road, without addressing the fundamental flaws inherent in the eurozone. But perhaps it's time to gain some perspective on the issue, and to be realistic about the EU and the single currency.

Cynics of the euro continue to ignore or fail to realise the determination of EU leaders to keep the single currency alive. Barring a political or economic Armageddon, the euro is here to stay, at least for the foreseeable future. The consequences of dissolving the single currency would be a disaster, not just for Europe, but on a global scale. Because of this, the eurozone will continue taking steps towards further integration as necessary until global fears of implosion dissipate.

But Rome wasn't built in a day.

The steps that need to be taken cannot be achieved overnight. As can be expected with a bloc of 27 countries, there's a fair amount of red tape. The excessive bureaucracy required for the EU to move forward with any significance is a major issue that impedes any hasty decision-making. But that doesn't mean that the will to makes changes doesn't exist.

It's obvious that every country in the eurozone wants the currency to survive. The problem is that leaders differ markedly on how best to keep it from dying. But the latest summit shows political manoeuvring at its best. The most exciting element of the summit was how the historic agreement was reached – through good old fashioned realism and functional necessity.

As with all difficult decisions, the EU only moves forward when absolutely necessary for the survival of the state. Which is why after a day of negotiations, Spain and Italy delivered the ultimate threat to Germany – agree on specific terms to resolve the debt crisis, or the growth pact is dead in the water.

The move by Italy and Spain was a brave tactical decision that showed just how desperate the situation has become. But it paid off in a big way, with leaders finally agreeing to "break the vicious cycle between banks and sovereigns”.

And the EU thrives on desperation. After being forced into a corner, Chancellor Angela Merkel conceded on a number of points, including allowing the bailout funds to lend directly to banks. The political manoeuvring means that finally the group can move forward in dealing with the ongoing crisis.

As ever, the problem that Europe now faces is the ability of leaders to implement the agreed solutions at a national level. Each step will receive both political and legal resistance. Of those in the eurozone, Merkel is likely to face the toughest opposition from her electorate.

Media in Germany are already blaming Merkel for caving in to the demands of southern Europe, saying that she was "defeated" by Italian Prime Minister Mario Monti and Spanish Prime Minister Mariano Rajoy. As she returned to Berlin with her head bowed and her "defeat” fresh in German minds, she faced tough questions from all sides.

Merkel is now walking a tightrope whereby she needs to achieve a delicate balance between saving the eurozone while also having the continued support of the German public. The main obstacle for her is the threat of revolt at a national level. She has at last conceded on a number of sticking points, which could help to save the single currency. But while Merkel tries to rescue the eurozone from the brink, she may find herself floundering at home. Unfortunately, this is the risk that Merkel needs to take for the survival of the euro.