By Hugo Duncan 25th November 2011 Gloomy prediction: Jacques Attali says the euro has a 'one in two' chance of collapsing in the coming month Britain was last night planning for the collapse of the eurozone as Spain weighed up a bailout that could cost UK taxpayers £5billion. The Government is preparing for the biggest mass default in history and the break-up of the single currency bloc. Analysts warned that euro meltdown would wreak havoc in the banking system and plunge the global economy back into recession. Whitehall sources said contingency plans are being drawn up – and indicated that the longer the euro limps on, the more time Britain has to prepare. Fears are mounting that Greece will be forced to default on its debts as the crisis threatens to sink Spain and Italy. The storm hit Belgium last night as the country’s credit rating was cut from AA+ to AA by Standard & Poor’s amid tumbling confidence in the region. And a leading French economist, Jacques Attali, the former president of the European Bank for Reconstruction and Development, said there was only a 50-50 chance of the euro surviving until Christmas. Sources in Madrid said the new Spanish government is considering applying for international aid to shore up its battered finances. It is thought a bailout of around £340billion would be required to keep the country afloat – with as much as £5billion coming from Britain through the International Monetary Fund. The long-term debt ratings for the eurozone, the U.S. and Japan United Kingdom 2.22% France 3.71% Germany 2.21% Greece 27.97% Italy 7.21% Borrowing costs in Italy raced to record highs as the new government in Rome was hammered on the financial markets. In a move that raises the pressure on Italian prime minister Mario Monti, investors demanded a punitive 6.5 per cent interest rate on a short-term loan. ‘The pricing is awful,’ said Padhraic Garvey, an analyst at ING bank. Benchmark borrowing costs in Italy soared above 7 per cent – the level which triggered bailouts in Greece, Portugal and Ireland. The alarming developments in Spain and Italy threaten to cripple the eurozone. Credit rating agencies have warned that France’s coveted AAA debt score is under threat. Germany was rocked this week by the worst bond auction since the launch of the single currency more than a decade ago. Investors bought only 60 per cent of debt on offer from Berlin in a sign that the crisis is spreading to the core of the eurozone. The debt storm has triggered panic in Britain and America amid fears that it will tip the global economy into recession. The euro fell nearly 1 per cent against the U.S. dollar to little more than $1.32 and was down half a per cent against sterling, making a euro worth 85.6p. Brendan McGrath, a senior analyst at Western Union, said: ‘Confidence in the region diminishes while the outlook for a solution to the eurozone crisis seems as far away as it has ever been.’ -----------------------------------Now UK faces a £5bn bill to bail out Spain... as ministers plan for euro collapse
EUROPEAN TEN-YEAR BOND YIELDS
Comments (429)
Saturday, 26 November 2011
Politics List
"Euro set to collapse"...and we pick the tab for saving.....Spain? Why? Forget it!
They have had millions of our money already - building motorways, bridges,
railways, etc. - forget it!
Put it this way.....would they bail us out? Chancellor - DON'T YOU DARE!
Some very good Comments, at the bottom!
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Here's what other readers have said.....
Losing the will to live , just let me know when things are sorted .
- gordon, scotland, 26/11/2011 20:22
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Why should British Taxpayers fund a sinking Ship?
- Carl Barron, Christchurch, Dorset, 26/11/2011 20:16
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DIG DEEP, because it is you, the man and woman on the street whose going to pay for all this EU debacle. The ones who forced us into the EU, tax dodging billionaires, fellow travelling big business, and snouts in trough tax dodging MP's will all dodge the column as usual.
- allan , Dumping ground uk, 26/11/2011 20:13
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- J. Chamberpot, Denver, CO, USA, 26/11/2011 18:42 I'd keep quiet if I were you, did you not read the other news Item, I think you lot over the pond could be using chines currency (whatever that is nowadays) before too long so don't gloat too soon! (Buffoons the lot of them)
- Yorkie, Deepest, Darkest Yorkshire, Thank God!, 26/11/2011 19:30
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The EU is run by the unelected Commissioners who finish up with a big pension but pay nothing towards them They spend money like there is no tomorrow They are building a new Brussels History Museam costing £136 million the running cost will be £12 million a year Who is going to travel to Brussels to see it While dozens of British Museams are facing closure due to public cuts we will have to contribute £18.6 millions towards this House of European History Its all Empire building at our expence Who signed the Lisbon Treaty they should be made to answer for it No treaty should be signed without a vote by the people of the UK
- G Farley, Oxon, 26/11/2011 19:25
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If Merkel is so insistent of saving the euro then let them bail them out
- mark, Kettering, 26/11/2011 19:12
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So what happened to all of the smug, arrogant Brits who smeared those Brits who wanted nothing to do with the Eurozone ? Five years ago, weren't there insults like "Little Englanders" and phrases like "I'm British but also a proud European" and "Our future is with the French and the Germans". Where are those supercilious voices now ?
- J. Chamberpot, Denver, CO, USA, 26/11/2011 18:42
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What many fail to understand is that should the Euro fail you will not be celebrating for long as the UK along with everyone else will go into a depression. so grow up people !! - to the point , Germany , 26/11/2011 13:55 .................... You fail entirely to see the point mein Herr, We are not in the Eurozone, so OUR currency is not in doubt. The problem Eurozone county's are faced with is that they must decide whether or not to remain with the Euro, or dump it and revert to their own currency. Germany might decide to keep it, but most won't. This means that they will simply have renamed the DM. After a period of readjustment, which will undoubtedly lead to another recession, we will all get back to where we were 10-15 years ago....control of our own affairs. Many Germans are already fed up with propping up the Euro, and want out. This is not an anti-German POV, as so many of you read into it. It is just that we demand our independence, in every respect.
- Retired ex-soldier, sick of what this country has become, Essex, 26/11/2011 18:39
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UK out of EU now , bleeding our country dry.
- Mike, Yorkshire, England, 26/11/2011 18:36
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A short basic course in economics should be made compulsory for all UKIP supporters ... their ignorance is amazing - pete, Brighton, 26/11/2011 17:23 ........................and you of course know all that is necessary to put us back on track, how breathtakingly arrogant of you sir. I think UKIP under the leadership of Nigel Farage, knows far, far more than you ever will about finances, the Euro, and economics in general, having worked in the city's finance houses for many years, i.e. he is one of the VERY few politicians who has had a proper job. We hear all the time, people bleating about how the sky will fall in if we leave the Euro, without ONCE explaining how this will happen. Grow up, we are far better out than in, and the sooner the EC Act of 1972 is repealed, the better we will all be. BTW, if you have any Euro's get rid - pronto.
- Retired ex-soldier, sick of what this country has become, Essex, 26/11/2011 18:27
Read more: http://www.dailymail.co.uk/news/article-2066196/Now-UK-faces-5bn-bail-Spain--ministers-plan-euro-collapse.html#ixzz1eqeeY04W