EURO UNLIKELY TO LAST 5 YEARS: ECONOMISTS PREDICT CURRENCY BREAK-UP

* Euro starts week at four-year low against the dollar
* Currency will not survive coalition term - economists
* Greek sovereign debt crisis 'has not gone away'
* FTSE falls more than 1.6% over double-dip fears

The euro will break up within five years, according to a survey of leading economists.

The dire state of the public finances of Greece and other eurozone members such as Portugal, Spain, Italy and Ireland have driven the single currency to a four-year low against the dollar and cast doubts over its future.

The currency started the week by dropping to another new low against the dollar - falling below $1.19 for the first time since March 2006.

In London, the FTSE 100 Index was down more than 1.6 per cent in early trade because of fears Europe's debt problems could spread.

Markets continued to come under pressure after Friday's disappointing US job figures, which sent the Dow Jones Industrial Average on Wall Street down by 3 per cent .

Sentiment was hit further by mounting worries that Europe's debt problems could spread after Hungarian officials signalled last Friday that the nation was at risk of a Greek-style fiscal crisis.

In the first major test of opinion in the City since the election, 25 leading economists said the eurozone in its current form would not survive beyond the end of the British coalition parliament in five years' time - compared with eight who suspected it would.

Andrew Lilico, chief economist of the Policy Exchange think-tank, said there was 'nearly zero chance' of the euro surviving.

He added: 'Greece will certainly default on its debts, and it is an open question whether Greece will experience some form of revolution or coup and I would put the likelihood of that over the next five years as one in four.'

Douglas McWilliams, of the Centre for Economics and Business Research, said the euro 'may not even survive the next week'.

David Blanchflower, a former Bank of England policymaker, added: 'The political implications (of euro disintegration) are likely to be far-reaching - Germany are opposed to paying for others and may well quit.'

In the survey by the Sunday Telegraph, Tim Congdon of International Monetary Research, said: 'The eurozone will lose three or four members - Greece, Portugal, maybe Ireland - and could break up altogether because of the growing friction between France and Germany.'

The comments on the euro's precarious position will not go down well in the City.

It has been taking the view that the £691billion emergency bailout package had for the moment solved the sovereign debt crisis equation.

But Jeremy Batstone-Carr, global economic strategist at broker Charles Stanley, said: 'This is categorically not the case'.

'Greek debt will rise aggressively as a result of the IMF/EU bailout programme. The IMF itself estimates that Greece will owe 150pc of gross domestic product by 2015, up from 115pc, currently forecast.

'Net indebtedness will rise, again according to the IMF, by €110bn. The bottom line is that the Greek sovereign debt crisis has not gone away. In fact it has hardly even begun. '

Jean-Claude Juncker, chairman of the Eurogroup of euro zone finance ministers, yesterday dismissed concerns that Hungary might face a Greek-style debt crisis and said the current level of the euro did not worry him.

This morning stock markets suffered further turmoil after Asian equities tumbled overnight amid renewed concerns over Europe and fears for global economic recovery.

The FTSE 100 Index fell more than 1.6 per cent following falls of nearly 4 per cent in Asia.

Markets continued to come under pressure after Friday's disappointing US job figures, which sent the Dow Jones Industrial Average on Wall Street down by 3 per cent .

Sentiment was hit further by mounting worries that Europe's debt problems could spread after Hungarian officials signalled last Friday that the nation was at risk of a Greek-style fiscal crisis.

The euro hit fresh four-year lows against the dollar over the weekend - at 1.188 dollars - before recovering slightly.

It also lost further ground against the pound, which is now trading at nearly 1.21 - its highest level since November 2008.

Oil prices have slumped to near 70 dollars a barrel after last week's poor jobs data cast recovery doubts over the world's biggest economy.

News that US employers added a worse than expected 431,000 jobs in May knocked already fragile confidence and Hungary's woes added to concerns of a double-dip recession.

The response on Asian markets saw Japan's Nikkei 225 closed down 3.8 per cent, having been down 4 per cent at one point, while Hang Seng fell 2.2 per cent.

Hungary is part of the European Union, but keeps its national currency, the forint, which dropped around 5 per cent last week.

The country's state secretary sought over the weekend to play down comments likening Hungary to Greece, saying Hungary was aiming to meet the 3.8 per cent of gross domestic product budget deficit target previously agreed with the International Monetary Fund and the European Union.

He added that emergency cabinet meetings were taking place over the weekend and into today.

But economists at Barclays Capital said: 'It is far too early to say that the worst is over for Hungarian markets.

'Moreover, investors will demand more risk premia from Hungarian assets for the policy uncertainty and the very poor track record on communication by the new government.'

Banking and commodity stocks were among those worst-off in trading on the Footsie today.

Part-nationalised Lloyds Banking Group was down 4 per cent, while Royal Bank of Scotland fell 3 per cent.

BP was one of only a handful of stocks on the rise - up 1 per cent - as the under-pressure oil group benefited from signs of success from latest efforts to contain the devastating Gulf of Mexico oil spill.

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