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Vicky Pryce: 50/50 chance of euro surviving debt crisis
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Greece has been granted some temporary relief from its creditors as it looks set to secure a four-month extension of its 240 billion euro bailout. But with debt being rampant in several member states, the euro zone continues to face far more serious fundamental issues, says renowned UK economist Vicky Pryce. Without a solution to those, the euro may only have a 50/50 chance of surviving.
Vicky Pryce, Chief Economic Adviser at the Centre for Economic and Business Research, says Greece isn’t the only euro zone country struggling with debt following the global financial crisis. Cyprus, Ireland and Portugal have also been bailed out, which is why she believes the debt burden is far more a concern for the euro area as a whole than merely a national issue.
Hopes are high that the ECB’s trillion euro QE programme, starting March 1, will revive the euro area economy. But Vicky Pryce is concerned that without fiscal expansion and a new plan for how euro zone countries repay their bailouts, the EU’s common currency may hang in the balance.
She believes that Europe must rethink how its tackles the debt crisis and reduce the burden on individual states. If Europe had done just that for Greece, then the current crisis may have been avoided, she says.