Euro to 'disintegrate' unless European governments work together, warns EC

London, June 1 (ANI): The Euro will continue to face 'disintegration' unless European governments refuse to work together, the European Commission has warned.

Olli Rehn, the Economics Commissioner, gave the warning as Mario Draghi, the head of the European Central Bank, criticised national leaders for a 'lack of action' to help the single currency out of its crisis.

Spain remained in the eye of the financial storm amid continuing fears for its banking sector, The Telegraph reports.

Investors in Spanish banks are withdrawing money at a record rate. Over 55 billion pounds has been withdrawn and moved out of the country since last month.

The flow of money out of Spain has raised fears that its banking system could collapse, requiring a bailout that its government cannot afford.

Those fears have pushed Spanish borrowing costs, which will further intensify pressure on Spanish banks.

Despite months of market turmoil and repeated emergency summits, European leaders have made little progress towards measures that would persuade investors that the weakest euro zone members will be able to repay their debts.

Germany has continued to resist the creation of "Eurobonds", which would see German taxpayers stand behind the debts of poorer southern countries.

Rehn warned that even if that scheme were ever approved it would still not be sufficient to save the Euro.

The single currency's members needed "a genuine stability culture and a much upgraded common capacity to contain common contagion," he said.

Draghi and Mario Monti, the Italian prime minister, both put more pressure on Angela Merkel, the German chancellor, to stop blocking moves to pool the borrowing of euro zone members.

The Euro crisis eased temporarily earlier this year after the ECB made cheap loans to European banks. But the relief has proved temporary, and bond yields are rising again in Spain and Italy. (ANI)