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UK Ministers Warn Of Euro Collapse, Riots

From the UK’s Telegraph:

Prepare for riots in euro collapse, Foreign Office warns

By James Kirkup, Deputy Political Editor
25 Nov 2011

As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible.

Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis.

The Treasury confirmed earlier this month that contingency planning for a collapse is now under way.

A senior minister has now revealed the extent of the Government’s concern, saying that Britain is now planning on the basis that a euro collapse is now just a matter of time

Recent Foreign and Commonwealth Office instructions to embassies and consulates request contingency planning for extreme scenarios including rioting and social unrest

Diplomats have also been told to prepare to help tens of thousands of British citizens in eurozone countries with the consequences of a financial collapse that would leave them unable to access bank accounts or even withdraw cash.

Fuelling the fears of financial markets for the euro, reports in Madrid yesterday suggested that the new Popular Party government could seek a bail-out from either the European Union rescue fund or the International Monetary Fund.

There are also growing fears for Italy, whose new government was forced to pay record interest rates on new bonds issued yesterday…

Italy’s new government will have to sell more than EURO 30 billion of new bonds by the end of January to refinance its debts. Analysts say there is no guarantee that investors will buy all of those bonds, which could force Italy to default.

The Italian government yesterday said that in talks with German Chancellor Angela Merkel and French President Nicolas Sarkozy, Prime Minister Mario Monti had agreed that an Italian collapse “would inevitably be the end of the euro.”

The EU treaties that created the euro and set its membership rules contain no provision for members to leave, meaning any break-up would be disorderly and potentially chaotic.

If eurozone governments defaulted on their debts, the European banks that hold many of their bonds would risk collapse.

Some analysts say the shock waves of such an event would risk the collapse of the entire financial system, leaving banks unable to return money to retail depositors and destroying companies dependent on bank credit.

The Financial Services Authority this week issued a public warning to British banks to bolster their contingency plans for the break-up of the single currency.

Some economists believe that at worst, the outright collapse of the euro could reduce GDP in its member-states by up to half and trigger mass unemployment.

Analysts at UBS, an investment bank earlier this year warned that the most extreme consequences of a break-up include risks to basic property rights and the threat of civil disorder.

“When the unemployment consequences are factored in, it is virtually impossible to consider a break-up scenario without some serious social consequences,” UBS said.

Meanwhile, back in our country, we have Occupy Wall Street protesters who are praying for exactly this kind of financial meltdown. While it could really happen in Europe.

What a crazy world.

This article was posted by Steve on Monday, November 28th, 2011. Comments are currently closed.

3 Responses to “UK Ministers Warn Of Euro Collapse, Riots”

  1. Mithrandir says:

    WOULD THIS BE THE 3rd OR 4th BAIL-OUT OF EUROPE AT OUR EXPENSE?

    1. World War I
    2. World War II
    3. Financial bailouts of 2008-2009.
    4. The Euro bail-out coming soon.
    5. The muslim-horde bail-out of 2050.

  2. tranquil.night says:

    This is how great depressions are made and dark ages begin.

  3. eaglewingz08 says:

    I seriously wonder whether this talk of riots, is a pretext for the EU’s imposition of draconian laws doing away with the final vestiges of popular sovereignty in the EU member states.


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