A structured break-up of the euro area would be of enormous benefit to the Irish economy and currency status, a firm of leading economic consultants has claimed.
A report by Capital Economics has said a dissolving of the 16-nation group would boost the competitiveness of the weaker member states and save all of the countries involved from years of economic stagnation.
The economists said, "The threatened break-up of the eurozone – which many see as a potential disaster – would actually open the door to renewed economic growth, not just for weaker members of the zone, but for Europe as a whole."
The crisis in Greece has driven down the euro across the board and forced the Spanish and Italian governments to enforce austerity measures just to keep afloat. Last Thurday's IMF forecast for growth this year also highlighted the limited progress, keeping its forecast at one per cent growth, which expanded by only 0.2 per cent in the first quarter.
The group said the weaker nations – Italy, Spain, Ireland, Portugal and Greece – were facing "years of economic pain," as they attempt to regain competitiveness with Germany, which runs a large trade surplus and restrains domestic demand.
The countries would be able to narrow the gap much faster, however, by returning to their former currencies and allowing exports to expand.
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