This has nothing to do with Lawrence Gonzi’s recent act of political hara kiri which he committed during the vote on the second reading of the divorce Bill, which other unrelated columnists equally dismissed as an act of political suicide, whereby as party leader he took his

party with him

It is solely concerned with the Euro crisis and the inherent risk of contagion that continues to prevail in spite of our Finance Minister’s reassurances that the situation is controllable, since he argued that the debts of Greece, Portugal and Ireland merely amounted to only around 6% of the eurozone debt.

When I recently visited Germany two things struck me most.

That while in the case of our Parliament it had to be the Opposition to trigger a long overdue debate in the House – with any vote being taken – in the case of the German Bundestag the euro crisis is not only invariably always centre stage but according to what I was told, 70% of the time of the European Affairs Committee of their Parliament is taken up with internal discussions about the issue. On the local front, our Foreign and European Affairs Committee never ever had the euro crisis on its agenda!

On the other hand I was equally alarmed by the fact that while everyone seems to be focusing on the above-mentioned three countries, at the back of the Germans’ mind there lingers a far bigger country – Spain.

Being the world’s 12th largest economy, as someone recently remarked, the ECB cannot just write a cheque and buy it!”.

A Spanish default would inevitably destroy the credibility of the euro. I am in no way implying that the euro would simply vanish into thin air, but apart from destroying its credibility such a default would or could possibly also undermine the currency in its present form.

At the time of writing Ireland has just seen its debt downgraded to junk status, which in practical terms means that its bonds have now made it to the non-investment grade.

While I was in Germany last week, Portugal went through the same experience, leading some to even resort to conspiracy theories that the credit rating agencies were part of a non-European plot to undermine the Euro. Forgetting for a moment that Fitch is not American-owned, but French!

At this moment of crisis we need to recall certain issues and clarify certain matters.

The euro was built on the assumption that no country in it would ever default.

While many Greeks think that the austerity measures being imposed upon them will merely serve to make the poor even poorer, the general feeling I got was that all these measures are most unlikely to address head-on the core problems, particularly since certain targets set – including those linked to privatisation programmes – have already been rated and considered over-generous and unrealistic by many. Others even claim that many Greeks are simply unwilling to submit to such measures and programmes.

All the talk of bailouts and voluntary roll overs might confuse people but at day’s end we are basically talking of loans that are meant to be repaid sometime, possible at the most ungenerous rates of interest.

As for voluntary roll overs many have been quick to dismiss them as ‘polite forms of default’ – giving the key institutions just enough time and breathing space to draw up their real plans – whatever shape they might eventually take.

While many hold back from admitting it, the main concern is not Greece per se. Particularly since as someone recently remarked its economy could vanish without trace and scarcely be missed by anyone else since it represents merely 3% of the eurozone GDP.

The real fear is the risk of contagion throughout the eurozone. And that is precisely what is preoccupying most governments.

This brings us back to Spain. If Spain turns out to be the next country in line then we will be playing a totally different ball game.

With eurozone woes even spreading across the Atlantic, no one should register any surprise that panicky investors have been driving the price of gold to all-time highs. As they did indeed last week.

Particularly when presidents of certain federal banks, like the Bundesbank, have been advocating that Europe’s politicians should be prepared for a scenario in which countries like Greece were forced to declare bankruptcy.

Greece’s importance remains highly relevant since in the eyes of many it remains the pivotal test case.

I am not in any way implying that Spain will follow next but the mere mention of Spain has been sending what some have described as “shivers in apprehension at what might befall it.”

When such scenarios develop, one impulsive reaction is to pin the blame on speculators who might be quick to move in to make a killing out of the situation.

But as others have counter-argued, sometimes the politicians are more to blame than others. Particularly when in certain instances we had Prime Ministers questioning the austerity drive of their own Finance Ministers – particularly when the latter happened to stand most credibly for a solid finance policy.

While certain countries like Germany constantly have their media inundated with comments and analysis of the euro crisis, in countries like Italy one stood to read very little about it. While the easiest way to fuel a crisis further is to talk about it – as in the case of bringing along a recession – on the other hand there is an additional even though avoidable risk of risking detaching oneself from reality in doing so.

The key message seems to be, face up to reality or you will be punished.

In the case of countries like Greece and Italy so long as tax evasion remains rampant one cannot expect any instant homegrown solutions to surface overnight.

Some tend to even question the basic principles linked to the euro. But in my personal opinion we are now paying the price for seeing such principles breached in many member states.

While every attempt must be made to avoid panic, knee-jerk reactions, at day’s end investors are primarily interested in figures. Even more so when the countries involved happen to be indebted ones.

Those expecting the euro crisis to disappear overnight remind me of all those gung-ho self-appointed military specialists who think that a solution to the Libyan crisis is just round the corner.

While I accept the argument that in the euro crisis each country must, can and should be considered separately, the risk of contagion remains. And the idea of a domino effect cannot be dismissed lightly.

It will be interesting to find out how the Minister of Finance will be commenting on the so-called oligopoly of the Rating Agencies when the House meets tonight.

As well as what Malta thinks about the whole idea of creating a separate European rating agency. In plain English whether this forms part of a mere wish list, or whether it is attainable, regardless of any hurdles that may arise in the process.

The real litmus test will be whether we can manage to restore flagging confidence in the eurozone; as well as prevent catastrophic contagion to other larger economies within it. One meanwhile has to also distinguish between those countries that merely face a liquidity crisis and others which are almost certainly insolvent.

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Leo Brincat is the Shadow Minister for the Environment, Sustainable Development & Climate Change