November 17, 2010
Even as British officials and other Europeans bear down on a resolution to Ireland’s debt crisis, there is a lingering unease in the markets about whether one or more countries might eventually bolt the currency union.
Few economists predict the euro zone will splinter, but many more see some breakup risk — one that has contributed to volatility on bond markets in recent days and helped push the currency down.
“A significant proportion of investors think this is a possible if not probable scenario,” said Elga Bartsch, an economist at Morgan Stanley in London who does not subscribe to the gloomiest views. “It seems that the market is giving it a higher probability than before.”
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