Eurozone facing ‘survival crisis’

Busines Fears have grown that pressure will spread to other weaker eurozone countries (left), Drew Everhart, a homeless man, sits at the Urban Ministry soup kitchen in Charlotte, North Carolina, November 16, 2009. (right)

The European Union is in a “survival crisis” over eurozone debt problems, the EU Council president has warned.

Speaking hours before eurozone ministers meet to address threats to the bloc’s economic stability, Herman Van Rompuy said that if the euro failed, so too would the EU.

Members such as the Republic of Ireland and Portugal are under fresh scrutiny.

Questions have been raised over whether they can manage their debt without help from EU funds.

Mr Van Rompuy said he was “very confident” the problems could be overcome.

But he added: “We all have to work together in order to survive with the eurozone, because if we don’t survive with the eurozone we will not survive with the European Union.”

The Irish Republic has insisted it does not need EU help.
But there is intense speculation that both it and Portugal may be forced to use EU bail-out money.

Portugal’s finance minister has said that investors believed that his country would be forced to seek emergency help, because of the worries spreading in the markets.

Fernando Teixeira dos Santos urged Dublin to do the right thing for the euro and accept a bail-out.

And the Spanish treasury secretary called on the Republic to act quickly to end market uncertainties.

On Tuesday, Spain held an auction of government bonds – a routine way for governments to raise funds.

However as Irish bail-out concerns hit other eurozone periphery countries, the rates it must pay on money borrowed – the bond yield – was higher than that faced earlier in the year.

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