The eurozone is running out of time to save itself from a total collapse, Gina Sanchez, a director at Roubini Global Economics, told CNBC.
Greece will leave the euro in early 2013 after its current government collapses in the face of social unrest caused by ongoing austerity measures, Sanchez predicts. That will force problems in Spain and Italy to the forefront.
"Spain is a problem and Italy is almost unsolvable with the resources they have today," Sanchez said.
Next year will be a pivotal year for the euro, Sanchez told CNBC. Eurozone leaders may run out of options and problems may overwhelm them.
While German Chancellor Angela Merkel has continued to urge austerity and reject Europe-wide solutions, French President Francois Hollande and other leaders want to create economic growth. As more leaders argue for growth, Merkel has become increasingly isolated, Sanchez notes.
"Right now we're not seeing Angela Merkel budge," Sanchez says. "They are a long way apart. They just don't seem a long way apart."
The deep differences between Hollande's growth camp and Merkel "sets up a real divide that I'm not sure the eurozone can handle."
European leaders will meet later this week, but observers doubt they'll reach a solution. After two years of the debt crisis, eurozone summits have typically failed to meet expectations.
"What is at stake is not only the economic integration, it is also the overall economic confidence in the euro area, and indeed, our commitment to the European project," said European Commission president Jose Barroso, according to CNNMoney. "This is why we need to be bold and define the way forward."
Investors worry that Spain, which wants emergency help to shore up its banks, may be next country to get a bailout.
"This is the first EU summit that will take place when the bloc's fourth-largest economy is in the process of being bailed out while the third-largest continues to face a run on its debt," Nicholas Spiro of London-based consultancy Spiro Sovereign Strategy told CNNMoney.
"Make no mistake, this is the 'Spain and Italy' summit."
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