If these conditions do trigger reforms - which in many countries is long overdue - that would be welcome. However, the fact that a member country can be assured that its membership of the euro - even in the case of permanent violations of the rules - will be saved at any price causes moral hazard and creates an obvious potential for blackmail.

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Emu is based on rules enshrined in international treaties. The euro was created as a "depoliticised currency" - its stability entrusted to an independent central bank with a clear mandate to maintain price stability. Any attempt to "save" monetary union via agreements which transfer sovereignty to a European level, where violations of fundamental treaties have become a regular event, lacks any logic. In the end it will only further alienate the people from Europe itself.

A monetary union with a stable euro can only survive if central bank independence is fully respected. This implies that the European Central Bank abstains from fiscal policy actions. Yet to change the "no bail-out" clause ever more in the direction of a bail-out regime is not a step towards a democratically-legitimised political union. It is a move on a slippery road to a regime of fiscal indiscipline drowning hitherto solid countries in the morass of over-indebtedness.

Paying lip service to "political union" and praising the European project of economic integration, a piece against Eurobonds, for strenthening the Stability and Growth Pact, and against a "transfer union".

The only avenues Issing does not rule out are defaults and Eurozone exits - even expulsions.

Economics is politics by other means