As Italian Interim Prime Minister Mario Monti spelled out his grand master plan to rebuild Italy’s economy, students marched in protest.

At the same time, Spain, which is in the throes of an upcoming election, saw borrowing rates go through the roof, at some 6.9%, perilously close to the 7% margin which forced Portugal, Greece and Ireland to seek bailouts.

The markets are jittery, so much so that the worry has also spread to the US, where banks have also tumbled. As we have said all along, now France risks becoming embroiled as the contagion spills from risk state to risk state. It is no coincidence that these countries have massive sovereign debt problems coupled with high unemployment and stunted productivity and competitiveness. It is now beginning to happen; the domino effect.

France risks getting pulled in because it has all the above mentioned factors, along with another issue, which is its exposure to Spain’s debts.

Meanwhile, according to a report, Greece is losing out on about €60 billion in uncollected taxes.

The report comes from the findings of the task force set up earlier this year when it became obvious that Greece needed a lot of support to implement reforms promised in return for a massive international bailout and get its economy growing again.

The group’s first report paints a dire picture of Greece’s efforts to raise money to repay its debts, but it does also express “cautious optimism” for Greece despite the negative findings.

Analysts say that the eurozone’s slow and often fumbling efforts at resolving Greece’s troubles is one of the main reasons investors have lost confidence in the entire currency union, and there does not seem to be much that anyone can do to reverse that trend.

But to go back to Italy, Mario Monti, wants to spur economic growth while trying to be fair in imposing reforms urgently needed to save his country – and the euro – from financial disaster.

He said his new government’s policies would fight tax evasion, lower costs for companies so they can hire more employees and help women and young people find jobs.

He is under no illusion, and neither is anyone else. The end of the euro would cause the disintegration of the united market. The future of the euro also depends on what Italy will do in the next week.

Another priority would be tackling Italy’s chronic and widespread tax evasion. Hiding or underreporting income by the self-employed is rampant, and workers have long complained they bear an unfair share of the nation’s high taxes.

It is clear that the EU and the eurozone are at a crossroads. German Chancellor Angela Merkel has begun pushing for a more integrated Europe, both in terms of politics, as well as in terms of finances. Once that process starts, we will be heading down the road to a Federal Europe. And at this rate, it seems to be the only way to go. If any countries drop out of the eurozone, or indeed the EU, then it would spell the beginning of the end. If that’s what it takes to save this “unique experiment”, then that is what has to be done.