Eurozone will probably cease to exist by 2013, according to a new study published on Monday, reports the International Business Times.
Sliding euro and falling states expenditure will avert economic recovery in Southern Europe, widening the gap between the core Eurozone and peripheral countries, said Centre for Economics and Business Research (CEBR), UK.
“New forecasts for the Eurozone imply need for severe adjustment measures unacceptable to electorates in Southern Europe,” the report said.
Jean-Claude Juncker, head of eurozone finance ministers, on Saturday had cautioned that the ongoing debt crisis of Greece and other countries in the region could hit Italy and Belgium, Suddeutsche Zeitung, a German daily reported.
Noting that the crisis could have disastrous effect on the currency of the region, euro, he warned “we are playing with fire”.
“Sooner or later both the Greek population and international creditors will tire of fighting a losing battle, leading to a break-up of the currency union as Greece pulls out, probably followed by other countries,” said Douglas McWilliams, chief executive of CEBR.
“The eventual breaking up of the Euro is likely to damage the solvency of various European banks, especially in France. The danger of knock-on effects means that a bailout like that which followed the Lehmans collapse will be required, though the extent of it will depend on how quickly the authorities manage the process,” said McWilliams.