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Davos forum focuses on euro currency future amid European Debt Crisis

posted 26 Jan 2012, 04:41 by Mpelembe Admin   [ updated 26 Jan 2012, 04:42 ]

CCTV BEIJING - With the European sovereign debt crisis expanding, continued use of the euro by certain member nations within the European Union (EU) was a much discussed topic at the annual World Economic Forum (WEF) in Davos, Switzerland.

The EU celebrated its issuance of the euro currency ten years ago, but just one decade later, it has become a problem.

As pointed out by Dr. Nariman Behravesh, chief economist of IHS, the issue of euro currency might be the hottest topic in Davos 2012 due to the severity of the European debt crisis. Although the crisis seems to be easing up, nobody can be sure what will happen next.

Michael McKelvy, the president of Manufacturing and Life Sciences business group in CH2M HILL also said the euro is on everybody's mind, with some people thinking it is a big problem while others taking it as an overblown issue.

Some believe politicians will find ways to solve the problems caused by the European debt crisis. Like Kirill Dmitriev, Chief Executive Officer of Russian Direct Investment Fund, emphasized his belief that the European crisis will affect many countries and politicians will find the solution.

George Soros, founder of the Quanta Fund, analyzed the problem from the perspective of taking the European Union as a whole saying, "There's a real danger that the euro will undermine the political cohesion of the European Union. And this will generate both economic and political tensions that could destroy the European Union."

He once said that the disintegration of the euro will be unbearable to the world.

As for Greece, no one has found a way to stop the expansion of Greek debt crisis thus far. Still, participants in the forum expressed their concerns as to whether or not Greece will quit the eurozone.

"At this stage, we don't think Greece will break away from the eurozone. Greece is under the PSR negotiation, and the discussion of many projects is still underway. So we still hope to put Greece back on track, and we don't think the 'de-orbit' will happen. Even though the situation is severe, it doesn't mean that the euro has nothing to do but collapse, [the euro] is going in a direction with solution possibilities," said Zhu Min, vice president of the International Monetary Fund.

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