The independent Office for Budget Responsibility has warned that the Euro is at continued risk of a collapse, as a result of underlying uncertainties in many European economies following the recent economic crisis and spiralling deficits across the region.
The OBR, a body responsible primarily for UK Treasury oversight, suggested that with Spain and Portugal reportedly dealing with significant debt problems, the threat posed by nations on the brink of a bailout could eventually lead to a collapse of the Eurozone arrangement, undermining both the currency and the political framework currently in place.
While the forecast collapse would no doubt spell bad news for the respective economies involved, a spokesman for the OBR said that the end of the euro need not be ‘cataclysmic’, and that the risk of collapse without further economic revelations is unlikely.
However, the news will be seen as an unwelcome announcement for key European figures, as senior European ministers meet to discuss protocols for future national bailouts, following approaches by both Ireland and Greece for financial support.
Further, it was noted that a possible end to the single European currency had not been factored in to UK economic projections, which the OBR publishes on a frequent basis as an independent mechanism for judging economic performance.