Euro has 50% chance of splitting in two in the next six months

ON EUROPE

Smith & Williamson's Mark Pignatelli offers his predictions for the eurzone in 2011.

Once Portugal has asked for external help, the eurozone could gravitate into a high- and low-yield region with the likelihood of a run on bank deposits in the former group of countries. At this point, the EU will be powerless to intervene without the highly unlikely “nuclear” option of fiscal union. Rogoff is among those who believe it almost impossible for the fiscal arithmetics to work and, taking the UK as an example, in the first eight months of the 2010/11 fiscal year, the deficit (PSBR) has reached £104.4bn versus £105.1bn in the same period in 2009/10. The UK has not been able ...