The EU debt crisis is spiraling out of control and it seems that no one seems to know what to do about it anymore.

The latest is that UK financial watchdogs are warning British banks to make contingency plans for the disintegration of the eurozone, or at least the departure of some nations from the common currency group.

In addition, Japanese and US investors are steering clear of bond purchases and are sticking largely to, what are known as, ‘safe bets’. In simple terms, this means that the primary tool which European nations use to pay off their debts, has been severely dented. Countries sell off bonds, inexistent ‘funds’, which are basically projections of the amount of money it can safely pay off. It is, more or less, an I.O.U.

People do not want these I.O.Us. Even Germany, Europe’s powerhouse, struggled to sell its last bond issue, not getting half the target which it had set. On the other hand, Europe’s strugglers, Spain and Italy, managed to sell off their bonds, but perilously close to the 7% interest rate which is deemed to be unsustainable. Greece, Ireland and Portugal all had to resort to bailouts once they were forced to pay such high premiums.

The EU and the ECB is now calling for closer integration within the bloc. There was a hazy, yet at least, coherent vision earlier in the crisis when others, including Germany called for closer fiscal and political integration.

But now, although many players acknowledge that this is the only way ahead for Europe, no one seems to know exactly how it will be done and what ‘closer integration’ actually means. Well, it’s pretty simple really. There are two ways to go here. Europe can, one the one hand, move towards Federalism with a common fiscal and economic policy directed by a centralized ‘Super Commission’ and, perhaps recover by pitting the strengths of all nations together in a collective bond buying system.

On the other hand, it could start to disintegrate. We might retain the open borders and facilitated trade, but the currency would go, as would investment co-operation and more, as countries tweak their own exchange rates to remain competitive.

There is also a third way, which is the situation we find ourselves in today. Europe can continue to procrastinate and talk about the need to do something, yet never actually do anything. That would mean a gradual disintegration of the bloc which would drag everyone down without any chance of survival.

Those are, at the end of the day, the scenarios. We believe that the first one presented is the only way to go. If one were to read between the lines, it is the only way that the politicians believe we can go. Yet why are they doing nothing. Europe must act, before it is too late. The bailouts just did not restore market confidence. Do it. Now.