Euro crisis may be over in 2-3 years

VIENNA (Reuters) - The euro zone can conquer its crisis in the next few years if countries get their financial houses in order, the head of the bloc's rescue fund was quoted saying in Der Spiegel magazine, scolding Germans for being too pessimistic about the region's outlook.

"There is good reason to hope that the crisis is over in two to three years' time," European Financial Stability Facility (EFSF) chief Klaus Regling said, according to a preview of the weekly German magazine.

The Eurozone Crisis Then and Now

The expansion of the European financial crisis and its deepening into a political crisis has followed a clear causal chain produced by a series of missed opportunities.

The problem began in early 2009, as a knock-on effect from the 2008 global financial crisis, which had already claimed Iceland as a victim. Iceland was not an institutional issue for the EU, but in 2009 Eastern members of the EU not using the euro began to have balance-of-payments problems. They suffered effective devaluations of their national currencies and sought help from Brussels to resolve their mounting budget deficits. In response, the EU doubled the funds in an existing facility to address balance-of-payments problems.

ECB’s Trichet: Advanced Economies’ Crisis a ‘Formidable Challenge

By Luca Di Leo

The U.S., Europe and other advanced economies face new formidable challenges in dealing with high debt and low growth, European Central Bank President Jean-Claude Trichet said Saturday.

Speaking at the end of a two-day meeting of top central bankers, Mr. Trichet said Europe was particularly challenged by its governance problems. Responding to questions by policy makers such as World Bank President Robert Zoellick worried by Europe’s ongoing debt crisis, he cautioned that overhauling the continent’s institutions is a “complex process… we’re observing history in the making.”

Private investors say biggest risk is the euro

By Alice Ross

The strength of the euro is now the top concern of private investors, according to a survey, surpassing worries over inflation, recession and unemployment.

A crisis in the euro was cited as the economic outcome most feared by 26 per cent of 1,767 people surveyed by Dianomi, the financial marketing group. Just 9 per cent cited a euro crisis as their main concern when the survey was last carried out in January.

Euro-crisis continues to weigh on City

By Peter Ranscombe

FEARS over Germany's credit rating dragged down shares across Europe yesterday, wiping out early rises in London as worries over the European debt crisis began to re-emerge.

All three of the major credit ratings agencies denied rumours of a possible downgrade of Europe's powerhouse economy but that didn't stop Germany's Dax index losing 4 per cent in just 15 minutes.