Will The Euro Survive 2012 ?

At the start of 2012 – we were asking if the Euro would survive 2012 intact.   https://www.moneyguideireland.com/will-the-euro-collapse.html
After the recent  election results in Greece and France  – the Euro could enter  a dangerous new phase

The election result in Greece means pro-austerity parties could now lack the parliamentary support and the moral authority to govern. But  any demands from Athens for the tough bailout conditions to be softened are likely to be turned down flat by the International Monetary Fund, the European Central Bank and the European Commission.

In May 2010, when  Greece received its first package of financial support, the idea that Europe was about to be gripped by a crisis that would put monetary union in peril was ridiculed. On Monday of this week , as the euro fell fast on the foreign exchanges, the Greek stock market plunged and investors piled into the safe haven of German bunds, it no longer seems quite so far-fetched.

The mood in the markets reflects the fear that the turmoil of the past five years is about to reach a climax over the coming months with a battle for the euro’s very survival.

For two years, Europe has been force-fed a diet of unrelenting austerity. But – growth has collapsed, unemployment has soared and – unsurprisingly – budget deficits have been much bigger than forecast. Election results from France and Greece show that it has also been a political disaster: voters have decisively rejected austerity .

The threat of  a Greek exit from the euro – rated as a 50-75% probability by Citigroup – will probably have a domino effect on Portugal, Spain and Italy.

Jason Conibear, director of foreign exchange firm Cambridge Mercantile, said the euro was currently as attractive to investors as a toxic derivative during the sub-prime crisis: “There’s every chance the euro will go into freefall in the weeks ahead against all the major currencies. Investors are waking up to the fact that the once-ridiculous notion the euro could collapse is increasingly the most likely outcome.”

On past form, the response of Europe’s policymakers will be to muddle through, to kick the can down the road to play for time. But that is no longer a realistic option.

Some people might want to take a look at this article if they are worried about savings held in Euros : –    Transfer Euros into Sterling