The Euro has a 20% chance of lasting through the decade
(Reuters) - The euro currency area has only a one-in-five chance of surviving in its current form over the next 10 years because of competitive imbalances between its members, a leading British think tank said on Friday.
The Center for Economics and Business Research said Spain and Italy would have to refinance over 400 billion euros ($530 billion) of bonds in the spring, potentially sparking a fresh crisis within the 16-nation euro area.
"The euro might break up at this point, though European politicians are normally able to respond to a crisis," said CEBR Chief Executive Douglas McWilliams in a list of 10 forecasts for 2011.
Sovereign debt crises in Greece and Ireland have rocked euro nations this year, leading some commentators to speculate that Germany could eventually lose patience with bailing out its more profligate neighbors, triggering a split in the currency bloc.
Chancellor Angela Merkel has repeatedly stressed Berlin's commitment to the euro and she said so again in her New Year message to the country on Friday.
"The euro is the foundation of our prosperity," she said. "Germany needs Europe and our common currency. For our own well-being and in order to overcome great worldwide challenges. We Germans assume our responsibility, even when it is sometimes very hard."
McWilliams argued that the deeper imbalances between the euro zone's stronger and weaker economies, which have become increasingly apparent since the 2008 financial crisis, would undermine the project in the long term.
"I suspect that what will break up the euro will be the failure of most of the countries to take the tough medicine necessary to make their economies competitive over the longer term," McWilliams said:
"We give it only a one in five chance of surviving in its present form for 10 years. If the euro doesn't break up, this could be the year when it weakens substantially toward parity with the dollar," he added.
Probably say its lower than that tbh surprised Estonia was willing to join it right now
Bring back the ruble I say!
Yea rite, somebody either was pretty damn drunk or just got faced with the default risk of his employment at his research firm, so he spinned some figures to hit the headlines.
That estimate is nothing but catchy. I doubt this guy knows what he is implying.
Forget the currency markets and listen to this guy because... (?)
No way. It would be too costly to go off the Euro. Plus, if the Eruo were going down, the markets would be showing it. Plus the Europeans would likely hang on longer to the sinking ship than to bail on it pragmatically(pride?).
Right just like the market showed us how distressed the global housing market was in early 2007...
Sarkozy just made an impassioned plea to the French to resist the urge to leave the Euro:
http://www.france24.com/en/20101231-france-euro-sarkozy-annual-address-…
If Germany wants to get off the Euro they could float the mark - the only problem would be that their currency would appreciate like bananas and then that's going to kill their exports. Maybe if they inflated the hell out of their currency they could bring down the exchange rate somewhat, but that might piss off their bond holders.
The krauts have definitely got the tiger by the tail.
http://www.economist.com/node/17629757
"The reunification of Germany was the great driving force that has pushed Europe forward. Germany was ready to pay any price just to have European support on this, then the Germans have always made the concessions that were used to advance the European Union, when attempting an agreement. No more. The Germans feel detached, self-centered and reluctant lovers of their old black-pier. This is why the European project has stalled. And like this it cannot go on. It is important to understand that if they do not move the next steps for the euro, the euro will go to pieces and the European Union can no longer inspire further progress. " - George Soros
I'm pretty sure he will push it in the right direction again lol
I don't think a step backwards is in the works. The blood of prime ministers may start to run in the streets if that happened. Europe unlike America will riot in the face of bs.
God Bless the USA
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