Worst ahead for euro zone, but it will survive: Reuters poll
By Jonathan Cable
LONDON (Reuters) - The worst is yet to come in the euro zone's debt crisis but the currency union will survive 2012 intact, according to a Reuters poll of economists who say France will probably lose its top-notch credit rating.
While just nine out of the poll's 64 economists said the bloc had turned the corner on a sovereign debt crisis, only 10 said the euro zone would not survive the year in its current form. The rest were reasonably confident it would.
A similarly firm majority of those surveyed in the last few days said France would lose its coveted 'AAA' rating in the next three months, while Belgium, Italy and Spain will suffer further cuts to their ratings.
Athens, which is racing to secure funding from its euro zone partners and the International Monetary Fund to avoid a sovereign default in March, was cited as the most pressing risk to the euro zone's economic stability.
"All eyes are still on Greece. The situation looks extraordinarily bleak. The household sector is getting hammered ... the banking sector is getting pummeled to pieces," said James Nixon at Societe Generale.
"But if someone keeps writing the cheques Greece will survive."
The poll indicates at least some improvement in sentiment compared with late last year. A November poll of leading academics and former policymakers, for instance, said the euro zone was not likely to emerge from the crisis intact.
However, many of the economists in the latest poll work for the large European banks that stand to lose the most under the gloomier scenarios for the single currency bloc - perhaps one factor behind the relatively more hopeful outlook. Continued...