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Shearman and Sterling partner, Barnabas Reynolds, warned the European Union could be moments from collapsing. While speaking with Brexit Watch on their Youtube channel, Mr Reynolds said the bloc must now deal with an inescapable crisis. Mr Reynolds claimed having one centralised currency will inevitably lead to divides and predicted a potential, west-east split or a north-south divide.
Mr Reynolds said: “There has been talk in the EU about splitting into a southern and northern Eurozone.
“The southern Eurozone lead by France, I think France is quite happy with that idea.
“I think Germany are interested in seeing if they can preserve the eastern Eurozone and some of the Benelux countries around it.”
Mr Reynolds noted why this issue would be so difficult for the EU to overcome and some of the key problems with the Eurozone.
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He said: “It seems to me that the same problem is down the track in one form or another.
“It is inescapable if you want a currency zone with people.
“Ultimately there will be a moment in time when there is an essential decision as to whether or not you share and subsidise or make grants for people in the other group to keep them up with the more successful group.
“If people in the more successful group are not brought into that choice and they are not prepared to make that leap then there is a breakpoint, that is what we are witnessing.”
Mr Reynolds noted that the coronavirus crisis is forcing countries that did not suffer a lot from the disease to consider whether they would pay for those that did.
Mr Reynolds continued: “We are watching this in real-time, will the people in the north relent and decide to make those grants to share to a level to bring everyone up to the same level and effectively create a state.
“It is not at all clear that they are willing to do that, it is not clear the German constitutional court will allow that to happen.”
In addition to this, Mr Reynolds raised the point that member states in eastern Europe will want to continue to spend money like that of their western counterparts.
Mr Reynolds added: “In eastern Europe, the same point will arise at one point.
“They will want to continue spending money in a particular way.
“They will simply get accustomed to a certain standard of living.
“They will want to be able to do things in the rest of the Eurozone in the same way.”
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