Thursday, 2 December 2010

Experts warn Irish crisis could have knock-on effect on the rest of the eurozone.

 As the Irish government unveiled their four-year plan to save 15bn euros, financial experts have voiced their fears that the problems will spread across the rest of Europe and will be detrimental to the future of the euro altogether.

While it may not mean the death of the euro as a whole, Lionel Barber, editor of the Financial Times said a “change in the structure and make-up of the eurozone may be necessary to ensure its survival.”

The euro has fallen by 1.9% against the dollar to less than $1.34 leaving investors fearing that other European countries may seek financial help in the near future.

Mr Barber added: “We are not seeing the death of the single currency; there are a lot more cards to play. What we may be seeing if the beginning of a change in the eurozone, so in other words the euro may survive but the eurozone in its present form, with its present membership, may not.”

Klaus Regling of the European Financial Stability Facility has rejected claims of a failure in the eurozone, branding it “inconceivable”.

Mr Regling said any countries giving up the euro would only face “economic suicide.”