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The Eurozone will muddle through for the “foreseeable future”

Date: 22nd July 2013

The Eurozone will muddle through for the “foreseeable future”

In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the future of the Eurozone in the light of economic and political developments since the “summer 2012 Eurozone crisis”.

In the wake of the crisis, which was contained by expert jawboning from the ECB, the Commission and the President of the European Council (Van Rompuy) proposed comprehensive plans for Genuine Economic and Monetary Union (GEMU). But since then the Eurozone’s political leaders have made little progress towards further integration, especially where there are financial implications. The northern creditor nations including Germany, the Eurozone’s dominant Member State, have “bailout fatigue”. It now looks as though there will be little further progress towards GEMU in the near to medium-term.

Despite “austerity fatigue” and the dire economic circumstances in the ClubMed countries, the currency bloc is likely to survive on current policies for the foreseeable future. The weak southern countries are expected to adjust to their current circumstances by implementing competitiveness-enhancing structural reforms, coupled with fiscal discipline.

Ruth Lea said, “Any break-up, partial or complete, is unlikely to happen in the near to medium-term, given that there are no anti-euro governments in the Eurozone and, with the exception of Cyprus, there is still popular support for the currency. If this were to change then all bets would then, of course, be off.  But as a central case we believe that the Eurozone will continue muddling through for the foreseeable future.” 

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Press enquiries:
Arbuthnot Banking Group PLC: 
Ruth Lea, Economic Adviser 
07800 608 674, 020 8346 3482,

David Marshall, Director of Communications  
020 7012 2432, 07502 285 835,

Pelham Bell Pottinger: 
Dan de Belder 
020 7337 1548,