German Chancellor Angela Merkel yesterday addressed the German parliament and said that members of the EU were working towards setting up a “fiscal union”.

The same issue was dealt with in yesterday’s leading article, where it was pointed out that this is the only realistic way to go in any attempt to stem the growing sovereign debt crisis.

It is as clear as crystal now. The EU must integrate further and there must be a common thrust, regulated by a centralised ‘power’ within the EU’s structures. This publication had suggested a ‘Super Commission’, but it seems that Mrs Merkel’s vision is tied in to the European Court of Justice. Whatever, the be all and end all is that Europe needs to integrate further. But for this to happen, a new treaty needs to be signed and this evokes memories of the last time this was put on the table.

The EU was trying to set up a Constitution, but the people of Europe were not happy about it. The issues ranged from reduced sovereignty to the “Christian” roots of the Continent. It was rejected in referenda and that was that. But it is clear that this is what is needed.

People may go on about losing sovereign power, but the truth is that there is not one EU nation that has the clout to go it alone, even Germany. If Europe is to avoid falling even further behind than it has already managed to dramatically do over the past three years, then all nations need to band together and rally under one banner. In other words, all EU nations need to pool their resources for us to become competitive. At the same time, Europe needs to absorb and eradicate the problems that have blighted some economies, which boils down to cheating, cooking books, overspending and blatant disregard for fiscal rules. This, of course, needs to be coupled with increased competitiveness and productivity.

In her speech, Mrs Merkel said: “We need budget discipline and effective crisis management mechanism. So we need to change the treaties or create new treaties.” We could not agree more and Malta must not forget that while small, is still one of the more stable states in Europe in terms of finances and this should therefore be reflected in the discussions that are due to take place next week during the European Council in Brussels.

Meanwhile, Nicolas Sarkozy would not be left out of the loop, even though it is now common knowledge that France is at great risk due to its exposure to Italian and Spanish debt. On Thursday, Mr Sarkozy said a new European treaty governing relations between member states was necessary to protect Europe’s place in the world. “We must confront those who doubt the stability of the euro and speculate on its break-up with total solidarity,” Mr Sarkozy said, according to the BBC.

Mr Sarkozy said the euro could not continue to exist unless eurozone economies pulled together, with France and Germany playing a key role to ensure “a zone of stability”. Well of course he would, wouldn’t he.

But, there is one huge problem in all this. Mrs Merkel normally gets it spot on, but how can one push the concept of European integration forward, but at the same time reject the idea of collective liability in the issuance of Eurobonds. Clearly, it has come to that point where it is all or nothing.