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 ...
As this site is now reader-supported via Patreon, the remainder of this article is only available to subscribers at a specific patronage level. Articles at patronage levels BRONZE, SILVER, and GOLD are denoted by the categories in blue capital letters above the post. Posts categorized DAILY are available to both SILVER and GOLD patrons.