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Euro could collapse, says government watchdog
Business digest: Comments come as EU members disagree over extending bail-out funds
One of the Treasury's leading independent forecasters warned that the collapse of the euro was "a possibility" last night during a meeting of the Treasury Select Committee.
"The general consensus is that sooner or later [currency unions] fail for one reason or another," said Stephen Nickell, a member of the Office for Budget Responsibility and a former member of the Bank of England monetary policy committee.
His comments came as widening divisons in the eurozone threatened to push Spain, Portugal and Ireland into further difficulty.
Belgium, Luxembourg and Italy have all pushed for improved bail-out measures to be put into place, while Germany, the Netherlands and Austria insist that the rescue package should not be increased.
On the euro, Nickell said: "There is a possibility it will collapse but at the moment it is not something to which I subscribe a very high probability." Asked to estimate the probability he said: "1.7 per cent".
Read a full report at the Daily Telegraph. ·
