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IMF says EU on brink of collapse, while euro currency may have to be scrapped

9 Jul

His warnings came as: 

* French bank Societe Generale analyst warned Italy and France could quit the single currency EU

* Rating agency Moody’s said the future of the entire EU was at risk

* Banks across Europe came under increasing stress

* The world’s biggest hotel group predicted that the fall in the pound would lead to a tourist boom for the UK.

But the IMF has also said that the outlook would be even worse if there are long, drawn-out negotiations between the UK and the EU.

Mahmood Pradhan, deputy director of the IMF’s European Department, said: “If that risk aversion is prolonged, we think the growth impact could be larger and at this point, it is very difficult to tell how long that period lasts.” 

The Washington-based fund hightlighted the UK’s importance as a trading partner for the EU as the destination for 13 per cent of EU exports.

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