UBS: Euro break-up – the consequences

The following is excerpted from today’s UBS research note by Stephane Deo, Paul Donovan and Larry Hatheway on the consequences of a euro break-up. The full note is embedded below.

Also see The recession is over but the depression has just begun which predicts an austerity that leads to the more “muscular form of government” UBS sees. On eurozone break-up, see Nouriel Roubini’s post “The Eurozone Could Break Up Over a Five-Year Horizon.”

The Euro should not exist (like this)

Under the current structure and with the current membership, the Euro does not work. Either the current structure will have to change, or the current membership will have to change.

Fiscal confederation, not break-up

Our base case with an overwhelming probability is that the Euro moves slowly ...


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