Daily Israel Report

Euro Could Collapse, Says Former Bank of Israel Head

Prof. Yaakov Frenkel predicts a collapse of the European currency in three years if Greek crisis is not solved. Stanley Fischer begins second term.
By Gil Ronen
First Publish: 5/2/2010, 11:30 PM / Last Update: 5/2/2010, 11:33 PM

Moshe Milner, GPO

The former Governor of the Bank of Israel, Prof. Yaakov Frenkel, has predicted a possible collapse of the Euro within the next three years.

Frenkel was quoted by the Bulgarian news agency BTA as saying that if European Union leaders fail to deal successfully with the Greek financial crisis, the European currency would not survive.

In contrast to Greece, Frenkel said, Israel's economy and its fiscal policies are stable. Israel, he predicted, will see the end of the crisis within two years' time.

Fischer: if there were peace...
Current Bank of Israel Governor Stanley Fischer, who officially began his second five-year term Sunday, said Israel could become a leading global economy if a Middle East peace deal were reached. The main challenges for now were to accelerate growth and reduce poverty, he said.

"This economy, with its dynamism and creativity, could grow much faster if we were to achieve peace with our neighbors," said Fischer. "If we were to achieve it, we could within one or two decades find ourselves living in one of the most advanced economies in the world.”

"These two factors – the economic and the military – are intertwined, and their interconnections are very complex," Fischer said.