Euro break-up

If you have been reading newspapers outside of USA, you should have noticed the rising chatter about imminent Euro break up. Now this is the kind of macro theme most of the analyst in USA are not talking about. It will have significant impact on worldwide markets. The country most likely to benefit from such a move is USA.

The disintegration of the euro may be drawing closer. Warnings of an EMU bust-up were once confined to a handful of euro sceptic journals: they have since spread to City banks such as Morgan Stanley and HSBC, and are now moving perilously close to the EU core itself.

"Will the Eurozone Crack?" is the latest missive from the Centre for European Reform, a pro-euro think-tank with close ties to the European Commission.

"The single currency was supposed to bring Europe together, but it risks becoming a source of economic dislocation and political division," begins the report, a 59-page demolition of EMU by the centre's business chief, Simon Tilford.

"Italy is the country most likely to trigger a crisis. It is not far-fetched to imagine a scenario in which the country is forced to quit the single currency. It could easily force other members to quit the eurozone and could even precipitate the unravelling of the single market," the paper says.