German leader Merkel is becoming increasingly isolated in the European contest, especially with her Christian Democrats facing a massive defeat in a recent election. Meanwhile, Europe remains in a state of uncertainty, with little hope of the euro's survival as a 17-country union.

Ed Balls, the shadow chancellor, and the former EU commissioner Lord Mandelson have said that the coalition must work with other European governments towards a new growth strategy if they are to ensure that the eurozone is to survive. The business secretary, Vince Cable, warns that Britain's economy could now be impacted if the eurozone fails to contain the problems. "The problem would affect us if it spread, if you had these contagion effects in Italy and Spain," he said.

Protests in Spain, political hostility in Greece, the crucial need for regional election in Germany and the increasing hostility to the EU in the Netherlands have all contributed to an air of crisis, adding to the last two years of financial meltdown and a bitter struggle over who will rescue the euro.

In terms of the Eurozone finance ministers meeting in Brussels today to discuss their options, the unresolvable split between the German and French will prevent the two countries moving forward. Also, tens of thousands of Spanish people took to the streets with rage at soaring unemployment in a country where anyone under 25 is now more likely to be out of work.

Meanwhile, opinion polls in the Netherlands show the hard left, anti-European Socialist party are currently the strongest single party before early elections in September.