Living standards would have to fall 15% in the weaker economies like Ireland, Greece, Spain, Portugal and Italy if the euro is to continue as it is, claims the Centre for Economics and Business Research. This would be greater than the fall in consumer spending faced in the UK during World War Two.To save the euro, the weaker economies would also have to cut government spending by 10% and give up some control over economic policy to the EU, according to the CEBR.
'There is no modern history of falling living standards in peacetime on the scale necessary to keep the euro in its current form. Indeed, the scale of the cuts necessary was only just achieved in wartime,' said CEBR chief executive Douglas McWilliams.
