EURO

The small Baltic state of Latvia could become the 18th member of the euro zone in 2014 if it continues on its current economic course, EU Economic and Monetary Affairs Commissioner Olli Rehn said on Thursday.

Berlin has ruled out allowing public creditors to write off Greek debt as a way of helping the country overcome its financial woes. However, Germany’s finance minister said he is open to other ways of helping Athens.

The head of the European Central Bank (ECB) on Sunday threw his weight behind a German scheme to allow the EU to intervene in countries' budgets and propose changes before they are agreed in parliaments.

Lithuanian opposition parties began talks on Monday on forming a government that will determine the country's path into the euro zone, having won an election marked by a backlash against years of austerity.

European Union (EU) leaders have agreed to create a single supervisory body for eurozone banks next year, a crucial step in breaking the vicious circle between banks and sovereign governments, officials say.

The Swiss Army is preparing contingency plans for violent unrest across Europe. A nation mostly famous for its banks, watches and chocolate fears it may face a massive influx of European refugees in the near future.

About 6,000 policemen will be deployed in the capital for her 6-hour visit, turning the city centre into a no-go zone for protest marches planned by labour unions and opposition parties

A financial analyst says "it is urgent to dissolve the eurozone, since the crisis has reached a critical point".

Angela Merkel wants to stop Athens leaving the euro at any cost – even it means manipulating the figures in the upcoming troika report – as a Greek exit would jeopardize her chances of reelection, according to the German newspaper Der Spiegel.

Even as Greece desperately tries to avoid defaulting on its debt, American companies are preparing for what was once unthinkable: that Greece could soon be forced to leave the euro zone.

US officials are worried that if Greece exits the eurozone, it will damage President's election hopes

Rothschild has taken a near-£130m bet against the euro as fears continue to grow that the single currency will break up.

Greece's debt has soared by nearly £20billion in three months, as European leaders were given fresh warnings to brace themselves for the break-up of the Eurozone.

Banks are particularly worried. "Banks and companies are starting to finance their operations locally," says Thomas Mayer who until recently was the chief economist at Deutsche Bank, which, along with other financial institutions, has been reducing its risks in crisis-ridden countries for months now. The flow of money across borders has dried up because the banks are afraid of suffering losses.

Mario Draghi pledged that the European Central Bank would buy up the bonds of the weaker members of the 17-nation single currency, as he sought to make good on his pledge to do "whatever it takes" to safeguard the future of monetary union.

The United Kingdom is more vulnerable than any other world nation to a worsening eurozone crisis and its economy would be hit the most if the euro falls apart - that was the verdict of new research today.

Thanks to its reliance on exports to the euro area and strong banking and financial links with the region, Britain tops a danger list of countries exposed to the eurozone (see map and table below), compiled by risk analysis consultancy Maplecroft.

The Eurozone was back on the brink last night as Spain edged towards a financial disaster that could tear the single currency apart.

Standard & Poor's Ratings Services has downgraded Greece’s sovereign credit rating to 'selective default' in response to the country’s decision to involve the private sector in its comprehensive debt restructuring.

Plans for Greece to default, potentially leaving the euro, have been drafted in Germany as the European Union begins to face up to the fact that Greek debt is spiralling out of control - with or without a second bailout.

The German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets.

Hungarian Prime Minister Viktor Orbán is “abusing” his power and eroding democracy, which may lead to the country losing its EU membership, former US Ambassador Mark Palmer told a Hungarian daily newspaper today.