Whether the euro is saved or goes down, today's meeting between German Chancellor Angela Merkel and French President Nicholas Sarkozy will be seen as the turning point in the two year long crisis that has rocked the EU to its foundation.

At stake: A radical plan being put forward by Merkel that would create a "fiscal union" among the 17 countries that use the common currency. That innocent sounding name actually means tearing a large hole in the sovereignty of nations and would overturn the very idea of a nation state that has dominated in Europe for 600 years.

For when you rip aside the rhetoric, a fiscal union would mean that EU headquarters in Brussels would determine tax and budget policies for individual states. Failure to comply with the EU's demands would result in draconian penalties. In effect, Merkels' plan would put the EU and not elected national governments in charge of allocating a nation's resources.

The Telegraph:

However, Mrs Merkel last week vowed to create a "fiscal union" and signalled an uncompromising push for treaty changes when all of the EU's leaders meet this coming Friday.

She made it clear that eurozone states would be called upon to relinquish economic sovereignty and be subjected to close central supervision - a pre-requisite for the eurozone to secure vital extra financial help.

"We are going to Brussels with the goal of achieving treaty change," she said.

Mr Sarkozy has used more moderate language because the French public does not support the idea of handing over tax and spending powers to central EU control, but he did call for a "true economic government" in the eurozone.

This is truly a hinge of history. One one side of the door is the old Europe - a collection of nation states who speak different languages, enjoy differing cultures, and possess their own history. On the other side is the potential for a true "United States of Europe" - the dream of conquerors and idealists alike. The advantages of the latter have been few so far, but the promise is nearly unlimited given the size and productivity of a united EU economy.

That "old Europe" won't disappear overnight. But in a few decades, it will almost certainly have been subsumed by the new Europe; a different Europe with a different face. It will be much less homogenous and far more diversified than the current version according to current demographic projections. But the important change will be that Europeans will think of themselves as a continental people rather than narrowly defining themselves according to what nation state they live in.