Tags: Eurozone | Crumbling | greece | euro

Investment Expert: Eurozone Is 'Slowly Crumbling’

By    |   Tuesday, 08 May 2012 01:49 PM

Europe is slowly crumbling, says the head of an investment research firm. The euro was supposed to unify the disparate counties of Europe. Instead, it has exposed their differences, Chris Tinker, founder of Libra Investment Services told CNBC Tuesday.

"The permanent cost of debt is not uniform anymore," Tinker said. "The euro is not a unifying force. We are having to manage in what is a slow crumbling of what the euro was about."

Investors are now focusing on stocks of individual countries rather than looking at Europe as a unified entity.

"French investors are investing in French stocks, French bonds and French assets," he said, adding that they are realigning assets and liabilities even if they don't think the euro will disintegrate.

Many observers think Greece, which remains embroiled in a debt crisis despite rescue packages, may leave the euro.

"If Greece gets itself to the point where the European administration says ‘We can’t play this game anymore,’ that starts a domino effect," Tinker told CNBC.
"They are between a rock and a hard place."

European voters are rejecting austerity measures that entailed severe cuts in public spending in an attempt to rein in the eurozone debt crisis.

France's new Socialist President Francois Hollande says he wants to promote growth instead of relying just on austerity, which some experts predict may cause a rift with Germany, the strongest austerity proponent. Greece has been unable to form a government after leftist parties opposed to austerity gained in recent elections.

"The political uncertainty in Greece will remain a big issue for some time now," Jim Reid of Deutsche Bank wrote in a note, according to CNNMoney.

"It's also inevitable that there will be much debate about Greece's future within the eurozone."

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Tuesday, 08 May 2012 01:49 PM
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