255 lines
6.6 KiB
Plaintext
Executable File
255 lines
6.6 KiB
Plaintext
Executable File
finance
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currency
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8234083
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-----
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# Euro stands just 20pc chance of survival in next decade
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## The euro stands just a one in five chance of surviving in its current form
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for ten years, according to the Centre for Economics and Business Research.
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![The euro is unlikely to survive in current form for next decade, says top
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economic think tank.][1]
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As public anger grew over bailouts to Greece and Ireland, several senior
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European politicians openly questioned the euro's future. Photo: Getty
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[![Harry Wilson][2]][3]
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By [Harry Wilson][4] 6:15AM GMT 01 Jan 2011
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[Comments][5]
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In its annual list of predictions, the CEBR said a new eurozone crisis was its
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number one forecast for 2011, citing the hundreds of billions of euros of debt
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that members must replace this year.
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"If the euro doesn't break up, this could be the year when it weakens
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substantially towards parity with the dollar," said Douglas Williams, chief
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executive of CEBR.
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Spain and Italy alone must refinance more than €400bn (£343bn) of debt in the
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first half of the year, which could prove impossible given investor fears over
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the finances of southern European countries.
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"The euro might break up at this point, though European politicians are
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normally able to respond to a crisis and I suspect that what will break up the
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euro will be the failure of most of the countries to take the tough medicine
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necessary to make their economies competitive over the longer term," said Mr
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Douglas.
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Mr Douglas added that he was not ruling out another round of government
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quantitative easing to support the credit markets and prevent a crisis.
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## Related Articles
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* [Estonia joins crisis hit eurozone and hopes for the best][6]
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01 Jan 2011
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* [EU debt markets 'face second credit crisis'][7]
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02 Jan 2011
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* [Italy's debt costs approach red zone][8]
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29 Dec 2010
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* [G20 and EU risking future 'meltdowns'][9]
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29 Dec 2010
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* [Lehman 'prophet' fears second US crisis][10]
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26 Dec 2010
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* [China interest rate rise to hit miners, metals][11]
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27 Dec 2010
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Speculation over the future of the euro reached new heights last year as what
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been a purely theoretical question became very real during the repeated crises
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that hit the eurozone in 2010.
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As public anger grew over bailouts to Greece and Ireland, several senior
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European politicians openly questioned the currency's future.
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Investors too have become increasingly sceptical, though few predict its
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imminent demise.
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F&C said last month that while the European Union may not continue for much
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longer in its present form, it was highly unlikley that the euro could be
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killed off.
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"We believe the events of this year will force the EU to introduce tighter
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controls and greater convergence of fiscal policies," said Rebecca Seabrook, a
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bond fund manager at F&C.
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Japan could also face its own crisis, according to the CEBR, with the
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possibility of a serious economic crisis in the world's third largest economy
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rated its fourth most likely prediction.
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Debt now equals 200pc of Japanese GDP, but up until now this has largely been
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financed domestically from the country's vast savings base.
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However, the continued growth in Japanese debt means more foriegn financing
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will be required, according to the CEBR, which could create the conditions for
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a crisis.
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"It is likely that the government will have to embark on fiscal retrenchment.
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Meanwhile, growth in the Asian export markets will slow and the ageing
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population will force the government to raise the retirement age again, this
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time to 75," said Mr McWilliams.
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Other CEBR forecasts include predictions of increased lending from UK banks,
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falling consumer spending, and lower than expected inflation.
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**[![][12] ][13]Looking for a job in Europe? [Telegraph Jobs][13] currently
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has [22 European vacancies][14] listed **
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[X][15] Share & bookmark
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Digg Fark LinkedIn Google Buzz StumbleUpon Y! Buzz
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[What are these?][16]
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* Share: [Share][15] [ ][17] [ ][18]
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[Tweet][19]
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http://www.telegraph.co.uk/finance/currency/8234083/Euro-stands-just-20pc-
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chance-of-survival-in-next-decade.html
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Telegraph
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## [Currency][20]
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* ### [Europe »][21]
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* ### [Finance »][22]
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* ### [Economics »][23]
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* ### [Banks and Finance »][24]
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* ### [Financial Crisis »][25]
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Related Partners
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* [Save money on your international currency transfers][26]
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In finance
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[![][27] ][28]
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### [Japan prompts first joint currency intervention since 2000][28]
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[![The yen briefly hit record highs against the dollar on Thursday as quake-
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hit Japan's nuclear crisis unleashed a global risk sell-off and talk of
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intervention by the Bank of Japan and the G7. This is how analysts explained
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the spike in the yen.][29] ][30]
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### [Why the Japanese yen has jumped][30]
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[![Euro crisis is far from over - what the experts are saying][31] ][32]
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### [Euro crisis is far from over][32]
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[X][15] Share & bookmark
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Delicious Facebook Google Messenger Reddit Twitter
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Digg Fark LinkedIn Google Buzz StumbleUpon Y! Buzz
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[What are these?][16]
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Share:
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* [ ][15]
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* [ ][17]
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* [ ][18]
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* [Tweet][19]
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* Advertisement
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![][33]
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telegraphuk
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Please enable JavaScript to view the [comments powered by Disqus.][34] [blog
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comments powered by Disqus][35]
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Advertisement
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## [Today's Sterling Prices »][36]
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Today's sterling prices, provided for telegraph.co.uk/expat by Telegraph
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Overseas Payment Services, powered by Moneycorp
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sponsored features
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1. [What happens when Greece defaults][42]
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2. [Dominique Strauss-Kahn: DNA samples confirm sperm traces on maid's
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on former IMF chief][45]
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5. [How the euro crisis end game might look][46]
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1. [What happens when Greece defaults][42]
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2. [Dominique Strauss-Kahn: IMF head 'hired prostitutes from Manhattan
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madam'][47]
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[Find your ideal job with Telegraph Jobs][53]
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var puffs_8120648 = new Array();
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