The talk in Europe is that everyone has been told to back off a bit while the British referendum is going on. There was an embarrassing moment the other day when rumours circulated of plans for a European army but the announcement is scheduled for a day or two after the referendum.

Good luck trying it without the British Army, by the way, Jean-Claude.

Anyway, no one seems particularly unhappy at this state of torpor. Several countries have said that there cannot be anything even in the next year or two which even hints at Treaty change and thus the prospect of a referendum. Even if Britain were to vote Remain, their voters would still be trigger happy.

But away from the headline stuff, day to day work has to continue in the EU’s earthly paradise, and right now there is a fair bit of head scratching at the Central Bank. There has been another quarter of negative inflation. This despite Mario Draghi’s attempt at quantitative easing, and his assurances that everything will be all right.

Consumers, of course, don’t mind negative inflation in the short term: it makes their pay packets go further. But for a finance minister it is a disaster. Oh, for the days of 10 percent inflation, when your debts in real terms dwindled away before your very eyes! That is what Pier Carlo Padoan, finance minister of Italy, must be thinking.

Italy has a debt:GDP ratio of 133 percent. Traditionally it inflated the debt away, the old Lira devalued and there were spurts of growth.

Not so now. No growth, pretty well, since the recession; no chance of devaluation, and all the debt having to be repaid while the means to repay it deflates away.

The same goes for other indebted countries, the usual olive belt suspects and, increasingly, France. They point out that the ECB’s mandate is to keep inflation at or near 2 percent, and that the Germans are stopping Mr Draghi from doing it.

But the next European crisis, if it occurs (let’s be generous), will most likely be with the banks. Wolfgang Schaeuble (it’s those Germans again) has repeatedly criticised Italian banks for their lack of stability, and there is much to criticise.

Total bad loans are over €300 billion, of which some €80 billion are sofferenze, loans to bankrupt companies from which nothing can be recovered, but which have not yet been written off.

Italy set up a €5 billion fund to rescue failing banks, which got up as far as €4.25 billion and then spent a billion underwriting the capital raising of a minor lender. The discrepancy between the big numbers and the small ones is not difficult to spot. Even leveraging the fund isn’t going to get it anywhere near what is required if there is a bank run.

Could there be a bank run? Well, shares in Italian banks fell 40 percent earlier this year. The markets are edgy.

Into this steps the European Union, as ever several steps away from reality. The new wheeze is that banks which are systemically important (big) should have to hold even more capital than at present required (with which they are already struggling).

The French and Italians have complained, but short of telling the Commission to get out more there is little they can do.

Brussels has stupidly invited the market’s spotlight to return to the state of the continent’s banks. Germany’s Schaeuble has welcomed the move, from the safe position that Germany’s banks were rescued from their Greek exposure by the whole of Europe.

There is a crisis brewing in the Eurozone and it would be interesting to hear the Remain camp’s views. Don’t, please, give us the one about this being a Eurozone problem.

One of the parties to the next euro rescue will be the European Commission, and if Britain is still a member of the EU when the music stops it will have to contribute billions.

Would you join a club with these problems? So why stay in one?

Tim Hedges, The Commentator's Italy Correspondent, had a career in corporate finance before moving to Rome where he works as a freelancewriter, novelist, and farmer. You can read more of his articles about Italy here