STOCK MARKET WATCH - Friday, 3 February 2012

[Demeter]

31. The experts' view on the euro's future: it doesn't have one

http://www.independent.co.uk/news/world/europe/the-experts-view-on-the-euros-future-it-doesnt-have-one-6298180.html

The eurozone cannot survive in its current form – that is the alarming prediction of top economists and politicians of all political hues, among them the former Chancellors Alistair Darling, Nigel Lawson and Norman Lamont.

In interviews and articles for The Independent today, the experts were asked for their short-term and long-term predictions for the future of the euro. While most believe the eurozone may well survive the current Greek debt crisis – especially given the political will invested in preventing a disorderly default – none is confident that the contagion could be contained, and most believe the new European Fiscal Compact agreed in principle on Monday is unsustainable as it would take key financial powers from national governments – and their electorates.

Many of the politicians and economists criticised the rush to austerity being imposed on Greece and Italy, suggesting it would be counter-productive by depressing growth, and said the competitive imbalances between eurozone members would be impossible to overcome. They suggested the ultimate consequence of the crisis would be a much smaller eurozone with Germany at the centre and countries such as Greece, Portugal, Italy and Ireland on the outside.

The only strong note of optimism was sounded by Olli Rehn, vice president of the European Commission responsible for the euro, who predicted the currency would emerge stronger from the crisis. "We are undertaking nothing less than an economic reformation of Europe," he said. "Step by step, we are creating financial stability and the conditions for sustainable growth and job creation."