Moody's, one of the principal international credit ratings agencies yesterday issued a stark warning to Germany and other triple 'A' rated Eurozone economies that the ongoing instability and worsening situation in Spain and Italy could have serious knock-on effects on the stronger economies in the Single currency bloc.

"This is the starkest warning yet that no member of the Eurozone is immune from the financial debt storm sweeping across Europe. The German ship risks being caught between the Scylla and Charybdis unless it quickly decides on a course of action to avoid disaster."

"Unfortunately there are no more quick-fix options left. Merkel and the German Bundestag must face the prospect of financial collapse of the Eurozone as the dominoes begin to fall one after the other, or stand by those countries currently showing signs of instability and back them up with a solid, structural foundation by installing a collective redemption fund based on common bonds that create a serious firewall of 2 to 3 trillion euro."

Parliament has requested formally that the European Commission present concrete legislative proposals in this regard in September.