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The eurozone is at “serious risk” of collapse and is lacking in political leadership as the debt crisis threatens to plunge Europe and the global economy into a recession.
Romano Prodi, the former president of the European Commission, said the eurozone had a “problem of power” and that it was unclear who was in charge.
His comments came as one of Europe’s senior economists warned that, without a co-ordinated response, the eurozone could “break into its constituent parts”.
At the close of trading, London’s FTSE 100 index was down 10 per cent for the week, representing a £149 billion loss, as European stock markets hit their lowest levels since the height of the financial crisis in November 2008.
For the first time since the beginning of the eurozone crisis, Italy’s borrowing costs rose above Spain’s, threatening to engulf the single currency’s third biggest economy. Giovanni Perissinotto, the chief executive of Assicurazioni Generali, the Italian insurance giant, warned that a political and economic catastrophe was looming after a day of financial trading that saw his company’s share value slashed amid panic at Italy’s faltering economy and high debt levels.
“Europe faces a serious risk of breaking up into its constituent parts and finding itself and its various member states impoverished,” he warned.
the eurozone could “break into its constituent parts”