Economist: Euro Crisis Could Erupt Again This Year

Economist: Euro crisis could erupt again this year Associated Press Copyright 2013 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Updated 1:34 am, Friday, January 25, 2013 While European governments and markets have been breathing easier in recent months after years of turmoil, it's no time for complacency, said Eichengreen, who has chronicled the Great Depression and explored the consequences of a breakup of the euro currency used by 17 nations. "Nothing has been resolved in the eurozone, where markets have swung from undue pessimism to undue optimism," Eichengreen told The Associated Press in an interview at the World Economic Forum in Davos, Switzerland. European leaders in Davos this week are seeking to reassure investors and corporate leaders that the continent is on the mend after its punishing debt crises. Heavily indebted countries such as Spain and Italy faced alarmingly high borrowing costs on bond markets last year, as investors wondered whether they would be able to keep paying their debts. Another was a proposal to set up a so-called banking union that would keep failed banks from bankrupting any one country by transferring the supervision of bank behavior and finances to a single, central EU supervisor at the ECB.