Euro zone faces biggest strains since launch
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IRJ Feb 5 - Facing the most severe economic strains since its birth 11 years ago, the euro zone looks likely to hold together for now but the exit of some of its weaker members cannot be ruled out in the long term.
Tumbling stock and bond prices in Greece, Spain and Portugal this week underlined investors' fears that heavily indebted countries in the south of the zone may be unable to cope with the fiscal and monetary demands of membership.
Many analysts expect the European Union -- or the International Monetary Fund, which said it would help Greece if asked -- to intervene with some kind of aid for weak members if that proves necessary to keep the zone intact.
But economies are diverging so sharply that even if weak members are bailed out, their problems could hurt growth in the zone for years, and conceivably prompt them to abandon the euro later this decade if the costs of membership seem too high.
Tumbling stock and bond prices in Greece, Spain and Portugal this week underlined investors' fears that heavily indebted countries in the south of the zone may be unable to cope with the fiscal and monetary demands of membership.
Many analysts expect the European Union -- or the International Monetary Fund, which said it would help Greece if asked -- to intervene with some kind of aid for weak members if that proves necessary to keep the zone intact.
But economies are diverging so sharply that even if weak members are bailed out, their problems could hurt growth in the zone for years, and conceivably prompt them to abandon the euro later this decade if the costs of membership seem too high.
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