Monday, June 7, 2010

Economists: Euro Will be Broken Up Within 5 Years; Germany May Be The One Leaving

The Sunday Telegraph did a survey with 25 leading economists. The results are not encouraging for the Euro. Out the 25 , 12 said that the euro would not survive in its current form this Parliamentary term, 8 said it would, and 5 are undecided.

"The single currency is in its death throes and may not survive in its current membership for a week, let alone the next five years" says the paper.

"A year ago or less, few within the City would have confidently predicted the currency's demise. But the travails of Greece, Spain and Portugal in recent weeks, plus German Chancellor Angela Merkel's acknowledgement that the currency is facing an 'existential crisis', have radically shifted opinion".

As for the 8 economists who say the Euro will survive, it won't be without casualties. Two of them said it would do so "only at the cost of seeing at least one of its members default on its sovereign debt".

Other economists interviewed say that it is a given that Greece will default.However, the question is whether Greece will experience some form of revolution or coup.

Greece Leaving Euro? No, Germany leaving.

Several economists say that "despite the wider suspicion that Greece or some of the weaker economies may be forced out of the currency, the most likely country to leave would be Germany".

Peter Warburton, consultancy Economic Perspectives: "Possibly Germany will leave. Possibly other central and eastern European countries – plus Denmark – will have joined. Possibly, there will be a multi-tier membership of the EU and a mechanism for entering and leaving the single currency. I think the project will survive, but not in its current form."

Tim Congdon, International Monetary Research: "The eurozone will lose three or four members e_SEnDGreece, Portugal, maybe Ireland e_SEnD and could break up altogether because of the growing friction between France and Germany."

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1 comment:

Crash said...

Here's the link to the article on the Telegraph's web site:

Gives more depth and colour to the conerns.

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