Fears over the future of the eurozone grew last night despite German backing for a new bailout fund aimed at saving the single currency.
It ‘now seems unavoidable’ that basket-case Greece will default on its towering debt pile of around £300billion, a hard-hitting report warned.
In its quarterly eurozone forecast, financial specialists Ernst & Young also said there was a one-in-three chance of another damaging recession in the region as the debt crisis deepens.
That would be a major blow to Britain because it would hit trade and heighten tensions in the banking system, which could trigger a fresh lending drought.
Borrowing costs in Italy hit high levels as the financial hurricane spread.
It came as German Chancellor Angela Merkel won a vital victory in Berlin to increase the eurozone bailout fund to £383billion. The vote was seen as a crucial test of the German leader’s authority and essential to the future of the euro, amid fears of a backbench rebellion.
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See Also:
Eurocrat Storms Off Live TV After Paxman Calls Him An Idiot (Video Available)
Gold Prices Fall Flat as Europe’s Debt Dance Drags On
Europe Meltdown Seen Converging With Recession in Survey
Opinion: Worries remain after Bundestag vote
Afternoon Updates:
12:10 pm EDT, September 30th, 2011 — Lilico: Stop asking Germany to pay, and you might save the euro
12:13 pm EDT, September 30th, 2011 — Hannan: Is the survival of the euro in Britain’s interest?
12:14 pm EDT, September 30th, 2011 — Austria approves expanding eurozone rescue fund
12:15 pm EDT, September 30th, 2011 — Worst quarter for FTSE 100 since 2002
12:17 pm EDT, September 30th, 2011 — EU fraud and ‘irregularities’ hit £1.6 billion
12:33 pm EDT, September 30th, 2011 — German bailout vote is ‘too little, too late’
12:36 pm EDT, September 30th, 2011 — NEIN, NEIN, NEIN, and the death of EU Fiscal Union
See Also:
12:25 pm EDT, September 30th, 2011 — Noonan: Once Upon a Time in America