European leaders seem to have agreed upon the latest 159 billion euro plan to stem Greece’s debt crisis and contain it before it spreads to Italy and Spain. What is concerning global market watchers is the fact that Italy’s debt is three times that of Greece, Portugal and Ireland combined -  at a staggering R12,9 trillion.

Some attention has been placed on Italy’s debt plight, but the world stage has perhaps been slightly side tracked thanks to all the talk about Greece. Italy is arguably in a more parlous state than Greece and if Italy reneges on its sovereign debt – and it looks like it is going to without a mind-blowing bail out – the repercussions are almost unthinkable.

There are some market watchers who are talking about the ultimate demise of the euro and, quite frankly, if one regarded the euro as a company it would have to be viewed as technically insolvent.

I am one of those market watchers who is wondering if the euro will survive as a currency. How long will the richer euro countries continue to bail out the poorer ones – and how do the 27 member states, with completely diverse cultures and economies, live in financial harmony? The euro was introduced to world financial markets as an accounting currency on 1 January 1999, but it seems that the current crisis could not only precipitate an economic shockwave that could stifle the putative globally economic recovery – but it could also be the death knell for the currency itself. The Centre for Economics and Business Research (CEBR), UK, has said that the Eurozone will probably cease to exist by 2013. That might be a bold statement, but right now it brings with it an alarming sense of logic.

Bryn Evans