"I can’t even believe I am re-posting this, but given today’s events with discussions of a two tier Euro and Jurgen Stark’s explicit comments about Germany’s (or the ECB’s) refusal to become the lender of last resort, we have to very seriously consider the Euro break-up option. I posted this piece earlier in the year. Danske Bank provides a nice overview of the worst case scenario (see here for more):
“If overall sentiment starts changing and the political will vanishes in either the peripheral countries or the core this could trigger sovereign defaults. The defining event could be if Italy needs help, but it could also simply be a change in power following deterioration in the general support to further belt-tightening in periphery countries and/or an increase in resistance to further financial support in core countries. Another option that has been mentioned is an actual break-up of the EMU where all member states leave the euro..."at http://pragcap.com/europes-worst-case-scenario
