The Euroland of today is not likely to survive, forecast analysts.
According to the economists of a London`s consul­tancy Centre for Economics and Business Research (CEBR) the chance for the Eurozone to work further in its unmodified version is only that of 20 %.

The current Eurozone is not very likely to sustain, claim the economists of a Londons consultancy Centre for Economics and Business Research (CEBR). According to the CEBR, the chances that the Europes common currency will remain functioning as it is are only 20 %.

The CEBR published a report in mid-December stating that maintaing the present state of the Euroland would require a 15 % cut-down in customer expenses overall, or even more reduction in Ireland, Greece, Spain, Portugal and Italy.

Drop in living standards
Such course of action would mean more reduction in living standards than in the UK during the Second World War. That is the reason why the CEBR doubts the Euroland will prevent falling apart.

For the current euro to survive, there are five essential conditions to be met according to the CEBR. Firstly, the sustainable economic growth of Germany`s economy would have to reach at least 3 % for the minimum of the next 4 years. Furthermore, the EU would need to create an emergency fund which will be able to provide enough financial means to aid Spain and Italy. Thirdly, the EU is to create a control mechanism for the economic policies in weaker econonomies and to implement this instrument in the new treaty. Moreover, the government expenditures in poorer countries will have to be cut by 10 % or more. The last condition suggests dropping the living standards in economically weaker countries roughly by 15 %.

The conidtions are not bound to be met
The CEBR claims that the possibility of fulfilling all the 5 conditions implied at once is basically nil, since it will be neither economically nor politically acceptable. ‚There has not been comparable reduction in living standards at peace in modern history to the one needed for the rescue of the euro in its present shape. Such a steep fall has only been registered during warfare. That is why I believe the chance of the euro surviving in today`s form is at best 1 in 5,‘ stated the CEO of the CEBR and the co-author of the report Douglas McWilliams.

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