EconomyEurope

‘Eurozone collapse begins in 2012’

A leading think tank has predicted that at least one country will pull out of the eurozone this year and the currency block will collapse within the next decade.

According to the Centre for Economics and Business Research (CEBR) report published on Monday, the likelihood of a euro breakup in the next decade has increased to 99 percent.

“It now looks as though 2012 will be the year when the euro starts to break up. It is not a done deal yet, we are only forecasting a 60 percent probability — but our forecast is that by the end of the year at least one country (and probably more) will leave,” the London-based CEBR said in a statement.

The think tank said that Greece seemed “pretty certain” to leave the euro and it now looked “more likely than not” that Italy would follow suit.

Italy and Greece are both in the middle of a huge debt crisis and had to implement harsh austerity measures which some fear could stifle economic growth.

According to CEBR, the lack of economic growth will be the main reason for a euro collapse.

The report added that the British economy is already in recession, with growth likely to contract in the final quarter of 2011 and the first quarter of 2012.

Europe has for months grappled with an economic and financial crisis. Insolvency now threatens in-debt countries such as Greece, Portugal, Italy, Ireland and Spain.

There are fears that more delays in resolving the eurozone debt crisis could push not only Europe, but much of the rest of the Western world back into recession.

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