Standard Bank Predicts Possible Greece and Ireland Exits from Euro in 2010
As The Daily Reckoning has discussed before (see: Is the Euro Doomed?), the troubled European PIGS (Portugal, Ireland, Greece, and Spain) are again contributing to strain in the euro area.
Today it’s Greece, Ireland, and Spain that are in the news. Here’s Standard Bank’s take on the first two (via Bloomberg):
“Greece and Ireland are among countries in an ‘intolerable’ economic situation, which may lead to bailouts or even an exit from the euro area by the end of next year, according to Standard Bank Plc…
“‘Countries like Ireland and Greece may not be able to grow out of the current crisis,’ [Steve Barrow, head of Group of 10 foreign-exchange strategy at the bank] said in a telephone interview today. ‘With interest-rate cuts, exchange-rate depreciation and significant fiscal support all off limits for these countries, bailouts or even pullouts from EMU may happen next year.'”
In a separate article, Bloomberg covers Spain’s growing unemployment (currently at 19 percent):
“The economy is forecast to contract 0.8 percent in 2010, lagging behind the European Commission’s estimate for European expansion of 0.7 percent. Spanish unemployment is expected to rise to 20 percent.”