Nick Clegg has been in Berlin today, along with Vince Cable. to meet with German ministers and launch the Queen Elizabeth Prize for Engineering, a £1 million reward for an invention that’s changed the world and benefitted humanity.

He took the opportunity to talk about the economic crisis engulfing Europe, making the point that Europe has to work together to sort it. There were no diplomatic niceties in his language as he criticised the failure to find a solution so far:

…our response to this brewing crisis has been woefully fragmented. We have failed on a number of fronts. We have tried to give Europe’s problems different labels, tried to keep them separate. But the world just doesn’t work that way. Management of financial risk, fiscal discipline, labour market reform; these are not just different chapters in an economics textbook. They are closely connected problems with consequences for us all. We have created different classes of country; strong and weak, spenders and savers, Eurozone and non-Eurozone. But these divisions are false. Europe’s economies cannot be prised apart and filed neatly in different boxes; they are too interdependent. And we the way we take decisions is undermining public confidence. Every few weeks European leaders sit down to yet another crisis summit, where another temporary solution is agreed. The tree is falling, and we are pruning one leaf at a time. It is piecemeal politics; endless tactics with no strategy.

He tackled the idea that if Greece were allowed to leave the Euro, the rest of us could just happily get on with our lives and pretend it was nothing to do with us:

And by the way, let me challenge the fashionable assumption being whispered behind cupped hands – that for some countries, leaving the Euro wouldn’t be that bad. That actually, a Greek exit now would be in everyone’s best interests. My own view is that that wildly underestimates the unpredictable, irrevocable damage that could be done to a monetary union when it is shown not to be permanent. No rational person interested in the wealth and wellbeing of Europe’s citizens could advocate taking such a risk: not with Greece’s future, or our own.

He outlined his four point plan to fix things – fiscal mechanisms such as Eurobonds, a responsive monetary policy, decent firewalls to provide a sustainable way of stabilising the banking system and creating the conditions for growth across the single market.

First, faced with different economies, which suffer shocks in different ways, Europe must either share common debt, or change the way money is transferred. You cannot have a monetary union in which one country saves, exports and invests and another spends, borrows and consumes without some mechanism to make it all add up. So we need new fiscal instruments in the Eurozone, through either Eurobonds or greater transfers between Eurozone members.

Second, the European Central Bank has to act as a real monetary backstop, a lender of last resort. This is critical. Fiscal action across the EU must be supported by responsive monetary policy – with central banks prepared to intervene aggressively to support demand.

Third, we must build a firewall big enough and strong enough to stop the flames from spreading. At the moment, countries are stuck in vicious, periodic uncertainty. Tottering banks are propped up by governments. Governments then take the hit from bond markets. Lenders then question whether governments can still shore up the banks. And so the pendulum swings back, only this time everyone’s costs have gone up and the taxpayer ends up deeper in the hole. We need to find a sustainable, realistic way of re-capitalising and stabilising banks.

Fourth, we need to get serious about structural reform. The creation of the single market – the largest borderless single market in the world – is an incredible achievement, one that still has the potential to create hundreds of thousands of jobs. But if that potential is to be realised, we must allow the single market to flourish. We must maintain a relentless focus on creating the right conditions for growth.

Given Nick Clegg’s experience working at the heart of Europe, in the office of the Trade Commissioner, leaders across the EU would do well to take his advice.

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings