There is now speculation that if the eurozone breaks down, it could actually help the economy of the United Kingdom in the long run if it survives.
Polly Curtis
raids review the consequences of a few euros a crisis in the UK. Contact below the line, send your views polly.curtis @ guardian.co.uk or tweet @ pollycurtis
If Greece can not accept his austerity measures that may not be the cause of more bailouts to stop paying their loans and, finally, which means it could be expelled from the euro area. If this scenario occurs, then it is likely that other weak economies like Portugal and Ireland would be alright. The biggest concern now is that large economies such as Italy and Spain, may also be vulnerable. What was once unthinkable is looking increasingly likely, that the Greek crisis causes the disintegration of the euro.
But what that meant for the United Kingdom
general, there are three ways that a pause in the euro area can affect the UK:
The threat to the banks owed money by non
exposure to bad Greek debt is relatively low compared to Germany and France. But British banks are still linked to banks in the countries most vulnerable through the sale of insurance and other guarantees on debt default. Another bailout in the UK is unlikely, but ultimately, the British banks that have less to lend, which could create another credit crisis and slowing economic growth.
effects of competition
If the euro has plunged each member country would have a new currency with some flourish and others devalue quickly redraw the relative competence of the EU states and the creation of a enormous uncertainty.
reduced exports
staff reductions
spending across the EU and other countries are forced to bail out their banks would almost certainly have exports of contract, the slowdown in UK economic growth.
In the last week following theories have been formulated on how this could be developed:
. Last week, the National Institute of Economic and Social Research suggests that growth will not return to its pre-recession levels until 2014 and that the crisis in the euro area increases the risk of a recession to double-soak of 50% to 70%.
. Yesterday, Erst and young ITEM Club forecasts Fall of growth here in the Sunday Times (£), predicted that the crisis the euro area in Greece, Portugal and Ireland left the euro UK could reduce GDP by 4% to its economy six years ago resulting in a deep recession.
. Currently, the Centre for Economics and Business Research, forecasts that the collapse of the euro could lead to a recession in the UK, but the recession is almost inevitable anyway and if preceded by such an catastrohpic event could be shorter, and before recovery. The Telegraph report said here that if the euro drops, followed by austerity budgets that threaten the growth of counties could be relaxed and in northern parts of Europe could become relatively stronger, to help markets export of Great Britain. "If you break the immediate pain is more intense, but then there is a more stable and it is expected that growth in about 30 months faster than the eurozone survives in its current form," says the CEBR.
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