Visions of Emu doom

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Visions of Emu doom

What's the chance now of an Emu break-up? Euro-agnostics say the most likely event is the exit of a single country because euroland is too tough for it, or too weak. But just as likely, if not more so, is a fudge and fix by member governments desperate to keep the show on the road - ways would be found of pumping money into a country threatening default.

A paper by lawyers Norton Rose, Thinking the unthinkable, was the subject of a serious debate last month, hosted by London's Centre for the Study of Financial Innovation. It explored the taboo area of what happens to legacy contracts in a country's domestic currency if that country withdraws from Emu. The deals certainly won't all be treated as foreign obligations, suggests Charles Proctor, co-author of the paper. It will boil down to a question of intent (was the transaction intended to be domestic or international?), he opines.

A poll of the 45 people present threw up the following predictions:

One or two countries could exit in five to 10 years (12 votes - four said that would be the beginning of the end for Emu).

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