Friday November 11,2011
By Macer Hall, Political Editor
PREPARATIONS were under way last night for the break-up of the euro as Europe's debt crisis spiralled out of control.
As Treasury officials worked through the night to soften the impact on Britain, David Cameron warned that the single European currency was facing its "moment of truth".
Business Secretary Vince Cable went further and spoke about "Armageddon" while Brussels officials warned that the chaos threatened to plunge us all into a new recession.
France's Sarkozy and Germany's Merkel have been in secret talks over debt-ridden Berlusconi's Italy.
Certainly it affects our trade and potentially, in this Armageddon narrative, it affects the banking system, but we're not there yet.
Ministers are understood to be deeply concerned that French President Nicolas Sarkozy and Germany's Chancellor Angela Merkel are secretly plotting to build a new, slimmed down eurozone without Greece, Italy and other debt-ridden southern Euro- pean nations.
Well-placed Brussels sources say Germany and France have already held private discussions on preparing for the disintegration of the eurozone.
At the same time, City insiders yesterday speculated that the "death warrant" for the euro had already been written, with a new economic bloc dominated by Germany and France almost certain to emerge in its place.
Howard Wheeldon, senior strategist at BGC Partners, said the single currency experiment had failed.
"Undoubtedly it has failed. We know the concept of a single currency was flawed right from the start. There were too many big differences, in language, in culture and in the economies. There is absolutely no chance of the euro surviving in its current form. It cannot happen.
"There are limits to what the markets, the people and the voters will accept. That doesn't mean the euro won't carry on with fewer members, but it has been a failure."
Stephen Lewis, of Monument Securities, said the search for some sort of Grand Plan or mega-fund to save the euro was corroding the whole project.
