Foreign Office Warns Embassies To Prepare For Euro Collapse

The Foreign Office has advised embassies to establish contingency plans in the event that the collapse of the Euro deepens the global financial crisis

London, UK (Pryce Warner International) November 30th, 2011 – With the crisis in the Eurozone showing no signs of abating the foreign office has advised diplomats to devise plans to deal with the fallout of a collapse in the single European currency.

The potential impact of a collapse could leave Expats unable to withdraw money from banks and some predict wide-scale unemployment and potential riots.

As Greece has experienced several occurrences of civil disorder, it is considered that in the event of a collapse of the Euro that the same scenario could play out in many countries across Europe.

In addition to the debt crisis in Italy, Spain is again seeking new ways to finance its debt. This may include intervention by the European Union Rescue Fund or the IMF.

Italy now needs to sell over €30bn of bonds before the end of January to be able to finance its debts. In the event that this does not happen Italy would be forced to default on its debts. Belgium and France also began bond auctions this week.

Italian PM Mario Monti conceded that if Italy cannot finance its debt it: “would inevitably be the end of the Euro.”

In a similar move to the foreign office, the Financial Services Authority issued a public warning this week to Banks that they need to reinforce their plans for the dissolution of the Euro.

Several international corporations are also preparing contingency plans to deal with the collapse of the Euro.  This is largely in response to concerns that the political leadership of Europe will be unable to cope with the debt crisis.

If countries were forced to leave the Euro, the associated costs to corporations would potentially be very large. Smaller companies are reportedly not yet drawing up plans though larger multi-nationals are putting resources into analysing what a potential collapse would look like.

Siemens, the electronics company, have even gone so far as to set up their own bank that will allow them to deposit funds into the European Central Bank.

The increasingly drastic measures adopted by European finance ministers to control the debt are reportedly the main concern behind companies drawing up contingency plans.

Though the potential risks are considerable there is no clear consensus on what exactly a break up of the single currency or Eurozone would lead to.

David Retikin, Director of Operations at Pryce Warner International Group, a financial services company for Expats commented: “It seems that the attitude adopted by governments and companies in this case is not a case of if the Euro will collapse, but when. Despite the concerns of many, there is a great deal to lose on all sides should the single currency collapse, so hopefully this will quickly lead to greater political co-operation that will come up with a solution. That said, now would certainly be a good time for individuals to speak to their financial advisors to ascertain what their best course of action is and if they feel it is appropriate, prepare for the worst. The situation is not entirely grim, there remain options open to people that can help reduce the potential threat to their assets and for those concerned, now is the time to seek them out.”

-------------------------------
By: Aneil Fatania
Financial Editor
Pryce Warner International Group
For any corrections of factual information contained within our news items please contact our editor.
Email: af@prycewarner.com
Skype: newsdesk-pwi
Telephone: U.K.- +44 20 3364 5016 or Monaco - +377 97 97 29 22