Economist Intelligence Unit: ‘One in seven’ chance euro abandoned by countries


From The Daily Telegraph‘One in seven’ chance that nations will abandon euro:

The risk is roughly one in seven that Europe’s ongoing debt crisis will push member nations to abandon the shared currency, raising the spectre of the “effective end of the euro area,” the Economist Intelligence Unit has warned…

Attempts to restore investors’ confidence in debt-laden nations’ ability to honour their commitments could see the weaker eurozone members grow ever wearier of the demands placed on them, according to a new report from the research body.

Meanwhile, those countries whose finances are in better shape could lose patience with propping up other member nations, in this worse case or “ultimate risk” scenario…

The report’s central scenario – put at a 50pc probability – is that the eurozone will muddle through the crisis, with the most indebted countries accepting the harsh reforms needed to cut their deficits and stronger members reluctantly offering enough support to contain the crisis.

However even this relatively benign resolution of the crisis expects some countries to default on their debt, with Greece seen as the most likely. The least probable scenario, put at a 10pc likelihood, is that the eurozone will undergo a resurgence…

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This entry was posted in Bankers' Bailout, Budget, Debt Default/Restructuring, ECB/IMF, Economy, EU, Euro / Sovereign Money and tagged , . Bookmark the permalink.

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