THE eurozone is set to be destroyed due to the poor economies of Greece and Italy, a leading economist has warned.
Economist Max Otte said the eurozone will explode
Max Otte also said the demand for referendums in the wake of Brexit threatens to destroy the eurozone as Brussels struggles to reform.
The economist told German Magazine Focus southern countries who cannot afford reforms would be forced to leave the Euro as he said the anti-EU sentiment “cannot be avoided”.
He said: “In France populist voices may get very strong. It would be highly likely though that the EU would be destroyed if France was to exit. Anything else, aside from Germany, the EU can take.
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“There would be an urgent need for reforms for the Euro as well. Southern countries who can't afford to would have to leave the eurozone.
"Instead we are doing the opposite, meaning, we are now also burdening the German banking system with a union based on joint liabilities only to drag on the insolvency of the south and to go into insolvency together one day.”
Economists are already fearing struggling Italian banks could spark a major financial crash as the European Central Bank deals with a struggling eurozone economy and debt-burdened Greece, Italy, Spain and Portugal.
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EU bosses have told Italy to stop asking for a £3.4billion payout to save its banks as German finance chiefs warned Berlin cannot be expected to foot the bill.
Mr Otte said at some point the eurozone will explode.
He said: “Today we know that the Euro has damaged and thrown back the EU immensely. I said in my presentation in April 1998 that the system will last for about ten years, before the difficulties would begin.
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“It lasted for about eleven years before the issues began. The issues are gigantic. The states in Europe have conspired to keep this art project alive. As long as I apply this constraint, as long as there are still reserves in the system this will continue.
“I don't expect that the Euro will explode in the next years. At some point it has to explode because it's artificial and can't function in this form.”
In June it was decided the European Central Bank would be allowed to buy up debt and prop up the eurozone’s ailing economies, supported by Germany’s central bank.
At the height of the financial crisis, chief of the ECB Mario Draghi pledged to do "whatever it takes" to keep the eurozone's financial structure from imploding.
But Mr Otte said the crisis is ongoing when the EU needs to pull together.
He said: “We have indeed entered a financial crisis in instalments. We're facing tough times - I can confirm that. I can't yet see the figurative light at the end of the tunnel.”
He added: “The Brexit can and has to be the impetus for a basic reformation of Europe.”
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http://www.express.co.uk/finance/city/689272/Eurozone-to-explode-demand-for-referendums-post-Brexit-threaten-EU-Max-Otte?
