Czech president ponders breakup of euro zone
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The current fiscal debacle in some European Union countries has led to the inevitable speculation over whether the euro currency will exist years from now.
This is because rising deficits across the continent have led to a higher chance that a country could default on its debt obligations, resulting in a wave of financial losses for banks across the continent that hold these bonds.
In a recent article on the Cato Institute website, Vaclav Klaus, the president of the Czech Republic, examines the possibility that the euro zone could eventually come undone. He noted that the euro zone is divided into two regions - one with a low inflation rate and one with a higher rate that includes countries like Greece, Spain and Portugal.
The global financial and economic crisis only escalated and exposed all economic problems in the euro zone - it did not cause them," wrote Klaus. He went on to note that since the establishment of the euro zone, economic growth for many member states has actually slowed down in comparison to previous decades.
If the euro zone ever does break up, it will have a profound effect on world financial markets. With that in mind, those who hold dealer gold investments may be well-positioned to ride out any periods of financial instability. Superior Gold Group |