Opinion

Paul Taylor

Analysis: Whatever happened to the euro zone crisis?

Paul Taylor
Aug 9, 2010 09:36 UTC

PARIS (Reuters) – What a difference a few weeks make.

In early June, doomsayers were predicting the demise of the euro after a 110 billion euro ($145.2 billion) bailout for Greece and a $1 trillion financial safety net for the rest of the 16-nation single currency area failed to calm market panic.

European banks were hardly lending to each other, the euro had hit a four-year low against the dollar, and there was widespread talk that Greece would have to default on its debt.

“We are assigning a higher and higher probability to a break-up of the euro zone,” Gina Sanchez, director of equity and asset allocation strategy at Roubini Global Economics told a Reuters Summit on June 8.

“I don’t want to overstate that. It’s not our base case, which is they muddle through,” she said.

Among the grounds she cited for a possible collapse were a lack of political will to cut budget deficits and Germany’s reluctance to foot the bill for rescue packages.

Whatever happened to the euro zone crisis?

Paul Taylor
Aug 9, 2010 06:43 UTC

PARIS (Reuters) – What a difference a few weeks make. In early June, doomsayers were predicting the demise of the euro after a 110 billion euro ($145.2 billion) bailout for Greece and a $1 trillion financial safety net for the rest of the 16-nation single currency area failed to calm market panic.

European banks were hardly lending to each other, the euro had hit a four-year low against the dollar, and there was widespread talk that Greece would have to default on its debt.

“We are assigning a higher and higher probability to a break-up of the euro zone,” Gina Sanchez, director of equity and asset allocation strategy at Roubini Global Economics told a Reuters Summit on June 8.

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