Euro 'needs federal union to survive' The euro has created very different problems in its member countries as the economic crisis roles on, but can they be resolved? Former head of the FSA Howard Davies believes that rooting European bailout funds straight into Spanish banks would mean it is "collectively" guaranteed and not simply by the Spanish government. But he warns that this is "a Rubicon the Germans don't wish to cross" as it is "a side door into eurobonds and mutualisation of debts." He told the Today programme that the eurozone is "not going to survive unless you accept a single authority... a genuine federal Europe." Terry Smith, chief executive of Tullett Prebon, agrees that the bailout funds should not be passed through the Spanish government. He believes it is not unfair on the Germans to have to bailout other eurozone countries as they have "benefited enormously from the eurozone." "We shouldn't get out our hankies for the Germans just yet," he told the programme.