Since the credit crunch hit, flaws in the European economic model have been exposed. Many countries in the region are now among the biggest beneficiaries of IMF funds, causing concern for investors on all continents.
Fifty five years after the signing of the Treaty of Rome which founded what is now the European Union, the EU finds itself at odds with the very countries that make it up: politicians increasingly put national interest and popularity at home first and blame the EU and the single currency - the euro - for most of their countries' economic troubles.
If that trend continues, analysts fear that the union that was built painstakingly over decades and brought peace and prosperity to the continent is in danger of disintegrating.
"Clearly I am very worried because the movement towards European cooperation or integration seems to have stalled at the moment and the aftermath of the euro crisis is going to make the movement towards disintegration more powerful," Stephen Tindale, Associate Fellow at the Centre for European Reform in London told CNBC.com.
"There's a clear need for some imaginative and inspiring European political leadership and there's no obvious figure willing or able to play that role," Tindale added.
The current – and most of the aspiring – political leaders in Europe seem to be doing just the opposite. Nicolas Sarkozy, the conservative French president who is fighting for re-election, recently said that he was going to push for more trade protectionism in Europe and tighter external border controls.
His opponent, Socialist candidate Francois Hollande currently leading opinion polls, has promised to renegotiate the fiscal pact agreed last December, which ensures that countries in the EU take the issue of tackling their debt seriously.
Meanwhile far-right leader Marine Le Pen, currently third in the polls, is focusing her campaign on "economic patriotism," which she sees as "the only way to revive employment without the inhumane austerity measures” that other European countries have had to face.
Europeans Vs. Europeans
In other parts of the European Union, outbursts of anger from German politicians against Greeks and other southern Europeans are notorious, and earlier this week Spain's Prime Minister Mariano Rajoy called on other EU leaders to be more cautious when they talk about Spain, reminding them that "what is good for Spain is good for the euro zone."
In a recent article in the Financial Times, billionaire investor George Soros warned that the EU was unlikely to continue to exist unless extraordinary steps are taken to save it from the consequences of the debt crisis, after measures such as injecting more liquidity in the markets failed.
"Latin American countries suffered a lost decade after 1982, and Japan has been stagnating for a quarter of a century; both have survived. But the European Union is not a country and it is unlikely to survive. The deflationary debt trap threatens to destroy a still-incomplete political union," Soros wrote.
This is the union's main problem: the lack of a common political identity; and it cannot be solved overnight.
According to Tindale, there is no European political identity because the European Parliament – which is made of members elected by citizens in each country – does not have substantial political power and the European Commission – the executive body of the EU – is not an elected organization.
"The fact that there is no European political forum is, I think, a significant factor in the absence of an European identity," he said. "I think that moving towards electing the European Commission is a sensible route to go. That would require changing the Treaty and referendums in some countries."
The trend towards divergence, rather than convergence is not only visible in politics. In economics, too, more often than not national interests take precedence.
The German central bank, the Bundesbank, recently announced that it would reject bank bonds guaranteed by states that received aid from the EU and the IMF, after the European Central Bank gave national banks more flexibility on picking collateral. The Austrian central bank followed suit.
Worse Things to Come?
The amounts involved are small and unlikely to cause problems for the periphery countries, but analysts said they were watching to see if these moves signal that worse things are to come.
"If it is a sign of things to come, if it is a sign that the Bundesbank and other banks are going to demand more assurance on loans to Greece and other countries, then it is a very worrying sign," Jennifer McKeown, senior European economist at Capital Economics, told CNBC.com.