...Spain and Italy would be focus of the crisis not Greece. ... existing rescue mechanisms wouldn't work if the crisis was exacerbated. ... EZB lends money to Spanish banks so they could lend to Spanish government. ESM lends to Spanish government so it can lend to Spanish banks. ... two drunks. ...Spanish needs to refinance 350 billion through 2014. ...Spanish could just about fit into the rescue scheme but there is no solution for Italy. ... eurobonds needed or even debt cut. ... Italy has to refinance 670 billion through 2014. ... political/financial/economic union would work. ... the restructuring effect would make it work. ... high interest rates increase pressure for Italy to leave Euro. ... doable for Italy because of low new debt. ... Italian domestic crisis suddenly over then. Ours would begin in earnest. ...massive German debt increase because of need to recapitalize banks and Target 2 loss. ... more damage to Germany than Italy if Italy exits. ... Either real union and conflict is moved to domestic level. ... Or Euro collapse and a different category of crisis.