Chance of Euro Death up 50%: Economist

Patrick Allen
CNBC
July 12, 2010

Fears over the future of the euro zone have eased somewhat in recent weeks.

On Thursday, European Central Bank President Jean-Claude Trichet hit out against the euro “pessimists” and the euro is well above its early June lows against the dollar.

But economists at Capital Economics are predicting it is more likely the euro zone will break up than survive. (Read the case for euro survival.)

“We have come to the conclusion that the balance of probabilities has swung against the euro-zone surviving in its present form,” Capital Economics said last week in a note to clients.

The team are very concerned by indebtedness, competitiveness and structural economic weakness in the euro zone, combined with recent market anxiety about sovereign debt and the continued fragility of the world economy.

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