By Macer Hall

ALARM at the economic turmoil in Europe intensified last night after the Government admitted preparations for the chaotic collapse of the euro were being “stepped up”.

Downing Street is understood to be embroiled in intensive “contingency planning” for Greece and possibly Italy, Spain and Portugal quitting the eurozone.

British banks have been urged by the City’s watchdog to brace themselves for the collapse of the single currency.

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The Financial Services Authority warned that the unravelling of the 17-nation eurozone could wreak havoc on the UK banking system.

City sources said Hector Sants, chief executive of the FSA, made the plea at a crisis meeting with senior bosses from high street banks.

It could be the explosion of the European Union itself.

Alain Juppe, France’s foreign minister

And, in a sign of growing panic, a senior French politician warned the crisis could trigger “the return to violent conflict” in Europe.

Alain Juppe, France’s foreign minister, added: “It could be the explosion of the European Union itself.”

The turmoil has fuelled speculation that the end of the euro in its current form may finally be in sight.

The alarm followed the soaring cost of borrowing in Italy and other debt-hit Southern eurozone nations as well as growing fears for the French banking system.

Following the FSA warning, the Prime Minister’s spokesman said: “We have been stepping up our contingency planning but I don’t want to get into detail on that.”

He said the Government, the Bank of England and the FSA were working together “ensuring they have the capacity to take action” in the event of Greece or other countries quitting the euro.

Last week Andrew Bailey, a senior executive at the FSA, said: “We must not ignore the prospect of the disorderly departure of some countries from the eurozone.”

But the decision of Mr Sants to intervene by ordering Britain’s high street giants to increase their preparations for a euro exit was seen as a significant escalation of the crisis.

Tory MP Douglas Carswell said a break-up of the euro would be “bumpy” in the short term but “good for Britain and good for Europe” in the long run. “It is good that the establishment in Whitehall finally seems to be preparing itself for the inevitable,” he added.

Nigel Farage, UK Independence Party leader, said: “Summit after summit produces no credible solution to the eurozone debt crisis, just a papering over the cracks. The euro-vanity project is in its dying days and everything must be done to ensure British banks do not go down with the sinking ship.”

He added: “Mr Sants is becoming quite the voice of honesty – recently he admitted the FSA was essentially a branch office of the new European Banking Regulatory Authorities. Now he is admitting that the euro is likely to break up.”


4 Responses

  1. Tony N says:

    Corzine Hiding what happened to MF Global Money with loop hole in 2005 Bankruptcy & Consumer protection law?

    Corzine is Hiding the fact of what happened to the MF Global Money with this Loophole I bet . You know what is Ironic about this is that Corzine when he was in the Senate voted against the 2005 Bankruptcy Bill that he NOW is using to hide the MF Global Money Loss behind and claim stupidity by .

    I bet this loop hole in the 2005 Bankruptcy and Consumer protection reform law helped Pelosi make a killing off insider trading too , , because each time a bank collapsed Pelosi’s bank investments gained from these failed banks and investment firms assets and private citizen bank accounts that are seized in the Collapse which would make the Stock prices rise in the To Big to fail banks that Pelosi would have investments in this I Bet . I wonder if President Obama has Investments in the Multi-National banks that would be benefiting from this kind of Insider trading schemes like Pelosi is that 60 minutes reported on ??

    We can create more Jobs than either way by amending the 2005 Bankruptcy and Consumer Protection bill and close the Loop Hole that is allowing assets to be swallowed up by Derivatives holders like the Multi-National banks because the bill allows them to be first in line to seize these assets .
    Here is why this 2005 Bankruptcy and Consumer Protection Law is so bad for the Middle Class , all the small banks that have gone broke, see here, ,or will have had their assets and those assets that belong to Middle Class people swallowed up by the International Bankers because of this 2005 Bankruptcy Law and that Directly infringes on the State sovereignty and commerce laws .

  2. Joshua says:

    Hey, I’m just excited to see someone use the term “wreak” properly, as in, “wreak havoc.” The Guardian, the Mail, and the Times have been hiring semi-literate boobs so long no one there, even in an editorial position, catches it when one of their reporters writes “wreck havoc” or “work havoc.” Come to think of it, I’m pretty sure no one at any of those papers reads anything before it’s published. Spellchecker and off to the press…

  3. MountainHome says:

    Does the loss of the EuroDollar strengthen the US$? Good article to read just before the new week starts.

  4. Vivek says:

    Finally eh? But of course, it is all just part of the single currency push worldwide.

    What will help turn this tide? Nothing. We can only turn our “selves”.


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