Decision time looms for Europe's leaders

The lack of hastily arranged emergency summits in the eurozone at the height of the holiday season appears to make a good case for politicians and market operators to spend more of their time on the beach. But the illusion of relative calm was shattered by Tuesday's economic figures, which showed gross domestic product declining in the single currency bloc and the wider European Union.

Of course, that the economy contracted by 0.2 per cent between April and June was not a surprise – the European Commission's low key response to the dismal performance was simply that it was "in line with market expectations and our economic forecast".

Growth in Germany has slowed. France's economy is stagnant. Portugal, Spain, Italy and Cyprus are all in recession. And then there is Greece, which inevitably produced the worst figures of the lot. Its economy shrank 6.2 per cent in the second quarter compared with a year before, with no real signs of recovery in sight. The spectacle of Greek Prime Minister Antonis Samaras pleading for an extension to the deadline for meeting the terms of the country's international bail-out – like a child begging his teacher for more time to finish last night's homework – will be unedifying but necessary.

There has been some growth in one area over the summer break, though – in the amount of speculation about the future of the eurozone and the EU itself. The debate about whether or not Greece will be forced out of the single currency still rages. But a host of other potential outcomes from the crisis are also being talked about as increasingly plausible options. Might German Chancellor Angela Merkel decide that shuffling Spain, Portugal, Ireland and Cyprus as well as Greece towards the euro exit door is the best option? Could Finland be the one to jump ship? With 46 per cent of Brits saying they want out of the EU in a recent poll, maybe the United Kingdom will be the first to make its move? Or perhaps it will be the German people who get the opportunity to have their say in a referendum?

Whether or not any of these scenarios come to pass is an open question that nobody can yet answer with any certainty. In some ways they are a distraction from the immediate problems that have to be dealt with before any conclusions can be drawn about the long-term make-up of the bloc. For example, will proposals for a eurozone banking union be viable? What, crucially, will the German constitutional court decide about the legality of the fiscal compact and the new permanent bail-out fund, the European Stability Mechanism? How will the likes of Merkel and French President Francois Hollande react to Greece's request for more time? One of the problems with taking long summer holidays is that the crucial decisions have to be made in a rush in the autumn. And it is clear that even at this stage in the crisis there are more questions than answers.

On Tuesday – talking about the possibility of Spain asking the European Central Bank to buy its bonds to ease the pressure on government borrowing costs – Spanish Prime Minister Mariano Rajoy said: "As is logical, until we know what we are talking about, we aren't going to take any decisions." It was a comment that could have been made by any EU leader at any time in the last couple of years. As and when they return refreshed from their holidays, they will have to start coming up with at least some of the answers.