"No one wants a Euro collapse. " This is what Austrian finance minister Maria Fekter told CNBC, but what are the 17 member states doing for a successful Euro in the coming years? There is a real and present sense of danger and the very future of the currency as we know it is at stake. Moody's ratings agency predicted a euro exit by any country would trigger a cascade of sovereign defaults.
If we look at some statements said by Euro zone public figures we will see that we can't be sure that we will have the Euro in our future. Mr Enda Kenny Ireland's prime minister said that the future of Ireland is at stake if European leaders fail to act decisively and prevent the spread of contagion.
New Italian Prime Minister Mario Monti said he had received a very positive reaction from the euro zone ministers to his fiscal plans, although he was told to take extra deficit cutting measures beyond an austerity plan already adopted to meet its balanced budget promise in 2013. Italy's borrowing rates shot up above 7 percent, an unsustainable level that already has forced three smaller EU nations to seek bailouts.
President Nicolas Sarkozy has unveiled two sets of budget cuts since August to preserve the credit rating and try to calm jittery markets. Two-year yields on French debt have climbed 62 basis points since Aug. 31 to 1.73 percent, while the rate on German notes of similar maturity fell 34 points to 0.38 percent. Bill Blain, a strategist at Newedge Group in London said “France isn’t trading like a AAA,” but ECB member, and Bank of France Governor, Christian Noyer said: "On the question of the possible breakup of the euro area I think this is totally unreasonable, there is no plan B, this is absolutely out of the question. Absolutely out of the question."
In a policy shift by Europe's main paymaster, Finance Minister Wolfgang Schaeuble said Germany was open to increasing the IMF's resources through bilateral loans or more special drawing rights, reversing the stance Berlin took earlier this month at the Cannes G20 summit.
Speaking a day after the world's major central banks took emergency joint action to provide cheaper dollar funding for starved European banks, Mario Draghi painted a dark picture of the state of the banking system. "A new fiscal compact would be the most important signal from euro area governments for embarking on a path of comprehensive deepening of economic integration. It would also present a clear trajectory for the future evolution of the euro area, thus framing expectations," he told the European Parliament.
It's starting to look as if all the wicked and unbelievable 2012 prophecies might not be so wide of the mark after all. As the world is transfixed by the slow-motion implosion of the Euro-zone, reports are emerging that Israel might strike Iran's nuclear facilities. Rumours say that British embassies are now taking active steps to prepare for the possibility of the euro collapsing – something that’s no longer as inconceivable as it once was. The Foreign Office is preparing contingency plans to help expats from the Costa del Sol and the Algarve who could be stranded without cash – or caught up in riots and civil unrest. While European leaders still say there is no need to draw up a Plan B, some of the world’s biggest banks, and their supervisors, are doing just that. The Royal Bank of Scotland, is drawing up contingency plans in case the unthinkable veers toward reality.
So the question comes automatically; Is the Euro on the verge of collapse ?