9 Dec 2010

Former UK premier predicts eurozone crisis

10:58 am on 9 December 2010

Former British Prime Minister Gordon Brown is predicting a major crisis in the euro zone in the first few months of next year.

The International Monetary Fund and EU have already bailed out Greece and Ireland this year, and markets are worried that Portugal, Spain and Italy could also require multi-billion euro rescues.

Mr Brown said Europe's banks, including those in the UK, faced massive liabilities and had inadequate capital to absorb losses, creating the risk of a Europe-wide banking crisis.

Gordon Brown told the BBC Europe must solve the euro's structural rigidities and the enormous debts of its banks, and that collective action is needed rather than country-by-country bailouts.