Traumatised by the devastation of the second world war, the founders of the European Community were guided by a simple insight: economic integration and stability are the cornerstones of peace and prosperity. Economic meltdown and nationalism in the 1930s created the seedbed for extremism and war in the 1940s. So, as EU leaders meet at an emergency summit this weekend, Europe’s history provides them with a stark lesson: collective action is vital in the face of an economic crisis that recognises no borders.

As national governments scramble to come up with their own solutions for the turmoil in their financial markets, the risk of beggar-thy-neighbour policies is becoming apparent. When the Irish government announced this week that it would extend a 100 per cent guarantee for all deposits in Irish banks, savers promptly moved their money from other European banks to Irish ones. Such dissonance in the policy responses between interdependent European economies is a recipe for uncertainty. This is the last thing we need when markets and consumers are suffering a crisis of confidence.