Here we go again. Europe is about to go through the mangle one more.The finger of Euro doom is no longer pointing at Greece, however, it’s locked on Spain.This was always going to be the risk. Fix Greece and the focus will shift.Keep Greece at the top of the headlines and simultaneously deflect the focus away from the two ‘too big to fail, too big to bail’ countries: Italy and Spain.Delay is the name of the Euro crisis game. The ‘medicine’ for the euro is slow acting. It involves convincing the Germans that a little bit, sorry, quite a lot of inflation isn’t so bad. It involves welding a ‘new’ Eurozone where sovereignty is diluted.Sovereignty is the key problematic issue now faced by the Economic and Monetary Union of the EU (EMU).At present, state governments within the Eurozone are free to continue with debt — crazed spending binges — knowing the central authority must bail them out or risk the stability of the euro currency.Why should the citizen of a poor euro country not have the same social benefits as the rich? Why shouldn’t Greece borrow a ton of money to host the Olympics?Conversely, there is no natural desire for one country to help the citizens of another.There is no uniformity of system that helps define what is fair between countries, or how things should work.The kind of uniformity enjoyed in the US is simply not present in the EU.To have a sound currency union, you need a sound political union. This means a fiscal union is required.It’s exactly what the UK saw coming and feared, why it decided not to adopt the euro currency.The UK did not want to be absorbed into a ‘Federal Europe’ welded together by economic necessity.Political unity within the EU is set to take a leap forward, with a new treaty set for ratification shortly.More strife in Spain could help seal the deal. However, it could also potentially kill the euro.Europe is walking a tightrope.Spain is bust, more so than Italy, which at least has — or until recently had — a budget surplus.Italy has a mountain of debt but it is still able to hold that in check, even pay it down.Spain, however, is like much of Europe — in no shape to do anything but pile more debt onto the mountain of old debt.Its economy is sunk.Its banks are now hold valueless property as assets. In a deflationary, recessionary environment, Spain must implode.After Spain, Italy is next I the firing line, then France.If this ‘domino’ contagion takes hold, even Germany could fold.Germany has 90% state debt to GDP. People forget that in recent times, even 60% debt to GDP has forced countries into default. So why not Germany?This is what the ‘doomsters’ predict.However, I believe it’s not going to happen.Why?Firstly, Europe has an established policy of handing out ‘good’ bonds in exchange for less highly-rated bank bonds within the continent.The US has even done this for Europe too, to stave off collapse.When this manoeuvre is no longer enough, it will hand out good bonds for any plausible bonds from European banks.The recent so-called LTRO (long-term refinancing option) was, in effect, a blank check to keep European banks solvent. Let’s not confuse ‘solvent’ with ‘not bust’ however. In this case, ‘solvent’ means ‘in funds’.So, if borderline-bust ‘Bank A’ gives borderline-bust ‘Bank B’ some of its new bad bonds and vice versa, the banks can then give these bonds to the European Central Bank (ECB) in swaps for the ECB’s ‘good’ bonds.This is in effect money from nowhere, as the wobbly banks can go on and sell the nice, new, minted ECB bonds for cash. Voila. The banks live to bank another day.Folks will in time want a higher interest rate from the ECB, but that’s no problem.Yet this process cannot go on forever.In the end, the ECB just buys back its bonds and anyone else it wishes to protect, hence keeping interest rates low.What does it buy them with? It buys them with CASH. That’s right ‘paper money’.This is called monetisation. In general, it’s a process that causes inflation.Germans get very angry about monetisation and inflation, but the point is, using this route, all the big debt mountains of state governments begin to evaporate.This is far better than suffering an avalanche of default.I have a packet of Zimbabwe 100 trillion dollar notes.I paid good money for them and I give them to friends as presents. This is solid proof that inflation is created most often for a political purpose.Without inflation, the euro will collapse, most countries within the currency will default.The economic chain reaction would flatten all the major economies of the world, causing chaos.It’s a scenario that’s just not necessary. A dose of inflation brings the aforementioned problems back under control.I’m not suggesting this is the correct way ahead.Personally, I’d like to see state governments forced to gobble less of their GDP, giving them a ‘kick up the pants’ to do a better job. However, that’s not going to happen either.This is why I made 130% profit selling some numismatic coins at auction in Hong Kong this week, having held them for only 18 months.The process of levelling global sovereign debt has already started, you see, and some people know it so are bailing out of cash. So as the next episode of the euro crisis kicks off, Europe will step in quickly and slurp up as much government debt as needed to keep interest rates in check. It will be another bumpy ride but money will be printed.In due course, the price of things will go up, and the value of money in Europe will go down.Clem Chambers is CEO of stocks and shares website ADVFN.com and author of titles including ‘A Beginner’s Guide To Value Investing’.