*European Parliament, Strasbourg, 13 June 2012

• Speaker: Nigel Farage MEP, Leader of the UK Independence Party (UKIP), Co-President of the 'Europe of Freedom and Democracy' (EFD) Group in the European Parliament - http://nigelfaragemep.co.uk

• Joint debate: European Council meeting - Multiannual financial framework and own resources

A. Preparation for the European Council meeting (28-29 June 2012)
Council and Commission statements
[2011/2920(RSP)]

B. Multiannual financial framework and own resources
Council and Commission statements
[2012/2678(RSP)]

Transcript:

"Another one bites the dust. Country number four, Spain, gets bailed out and we all of course know that it won't be the last. Though I wondered over the weekend whether perhaps I was missing something, because when the Spanish prime minister Mr Rajoy got up, he said that this bailout shows what a success the eurozone has been.

And I thought, well, having listened to him over the previous couple of weeks telling us that there would not be a bailout, I got the feeling after all his twists and turns he's just about the most incompetent leader in the whole of Europe, and that's saying something, because there is pretty stiff competition.

Indeed, every single prediction of yours, Mr Barroso, has been wrong, and dear old Herman Van Rompuy, well he's done a runner hasn't he. Because the last time he was here, he told us we had turned the corner, that the euro crisis was over and he hasn't bothered to come back and see us.

I remember being here ten years ago, hearing the launch of the Lisbon Agenda. We were told that with the euro, by 2010 we would have full employment and indeed that Europe would be the competitive and dynamic powerhouse of the world. By any objective criteria the Euro has failed, and in fact there is a looming, impending disaster.

You know, this deal makes things worse not better. A hundred billion [euro] is put up for the Spanish banking system, and 20 per cent of that money has to come from Italy. And under the deal the Italians have to lend to the Spanish banks at 3 per cent but to get that money they have to borrow on the markets at 7 per cent. It's genius isn't it. It really is brilliant.

So what we are doing with this package is we are actually driving countries like Italy towards needing to be bailed out themselves.

In addition to that, we put a further 10 per cent on Spanish national debt and I tell you, any banking analyst will tell you, 100 billion does not solve the Spanish banking problem, it would need to be more like 400 billion.

And with Greece teetering on the edge of Euro withdrawal, the real elephant in the room is that once Greece leaves, the ECB, the European Central Bank is bust. It's gone.

It has 444 billion euros worth of exposure to the bailed-out countries and to rectify that you'll need to have a cash call from Ireland, Spain, Portugal, Greece and Italy. You couldn't make it up could you! It is total and utter failure. This ship, the euro Titanic has now hit the iceberg and sadly there simply aren't enough life boats."

"It is necessary to adopt decisive and forceful measures to leave clear the irreversibility of our integration project, and in particular the single currency," the letter said. "The uncertainty regarding the euro is preventing the adjustment measures many countries are carrying out to have the desired effects that they should have," the letter continued. "This situation is worsening in an accelerated manner and it is necessary to address it as soon as possible."

Rajoy made the revelation on Wednesday in Congress, where he told lawmakers that what was required at the moment is for European to make a strong commitment statement in favor of greater union before opening a debate on how best to achieve this. "The future of the euro depends on us initiating this debate," he said. "The road won't be easy but it is an indispensable goal on which we must be in agreement."

We always feared that Angela Merkel's recent endorsement of a political union was a deflection, and this fear is now confirmed. The FT reports from Berlin that German officials are now playing down any expectations that Germany is ready to support a banking union and eurobonds, insisting that the existing tools of crisis resolution are adequate.

Instead German officials are pretending that they support a long-term process of political union. We are now back to where we were before: there is a need to act fast, but the German chancellor is chronically incapable of making the political case for burden sharing. Expectations in the German media, and among coalition politicians have also been "managed" in such a way that an agreement for a banking union would come as a total shock.

The Dutch finance ministry also said yesterday, according to Reuters, that a banking union should be seen as a long-term project that cannot be implemented immediately.