The Latest Doomsayers on Europe's Debt Crisis

As Europe's debt crisis rages on, a collection of financial experts and global institutions are warning European leaders that the Euro Zone could collapse if swift actions aren't taken.

As Europe's debt crisis rages on, a collection of financial experts and global institutions are warning European leaders that the Euro Zone could collapse if swift actions aren't taken. On Tuesday, the Euro Zone's finance ministers are meeting in Brussels to approve a plan to prevent contagion in bond markets from spreading to other countries as a rumored bailout of Italy is considered. Here's the latest spate of dire warnings over Europe's debt woes:

This may very well spread On Monday, the credit agency Moody's warned that Europe's sovereign debt could cause a number of countries to default or leave the Euro Zone. "The probability of multiple defaults (in addition to Greece's private sector involvement programme) by euro area countries is no longer negligible," reads the report. "In Moody's view, the longer the liquidity crisis continues, the more rapidly the probability of defaults will continue to rise." It adds, "A series of defaults would also significantly increase the likelihood of one or more members not simply defaulting, but also leaving the euro area. Moody's believes that any multiple-exit scenario -- in other words, a fragmentation of the euro -- would have negative repercussions for the credit standing of all euro area and EU sovereigns."

This is the beginning of the end for the Euro Zone Simon Johnson and Peter Boone in Bloomberg write Monday that "The path of the euro zone is becoming clear. As conditions in Europe worsen, there will be fewer euro-denominated assets that investors can safely buy. Bank runs and large-scale capital flight out of Europe are likely." Rather forebodingly, they predict that "Some nations will need to leave the euro zone. There is no painless solution ... Tragedy awaits. European politicians are likely to stall until markets force a chaotic end upon them."

European officials aren't acting quickly enough In a somewhat vindictive Monday report from the Organization for Economic Cooperation and Development, the group says it started warning leaders nearly two years ago that Greece's debt woes could spread. “We are concerned that policy-makers fail to see the urgency of taking decisive action to tackle the real and growing risks to the global economy,” said the group's chief economist Pier Carlo Padoan. "Concerns about sovereign debt sustainability are becoming increasingly widespread. If not addressed, recent contagion to countries thought to have relatively solid public finances could massively escalate economic disruption. Pressures on bank funding and balance sheets increase the risk of a credit crunch."

European leaders have only days to act Financial Times' Wolfgang Munchau is very pessimistic. Over the weekend, he warned that the "government bond market across the eurozone has ceased to function." He wrote that the "banking sector, too, is broken. Important parts of the eurozone economy are cut off from credit. The eurozone is now subject to a run by global investors, and a quiet bank run among its citizens." As such he says the eurozone may collapse unless European leaders act swiftly in the next few days. He proposes three steps. First, the European Central Bank must extinguish the bankruptcy threat by agreeing on an "unlimited guarantee of a maximum bond spread." Second, "a firm timetable for a eurozone bond ... It will be a joint-and-several liability of credible size." Third is the creation of a fiscal union. "This would involve a partial loss of national sovereignty, and the creation of a credible institutional framework to deal with fiscal policy, and hopefully wider economic policy issues as well. The eurozone needs a treasury, properly staffed, not ad hoc co-ordination by the European Council over coffee and desert."

This is what will happen if Europe doesn't act Business Insider's Henry Blodget forecasts a scary scenario if additional bailouts don't occur in Europe. Though he thinks the continent still has time to act, if it doesn't move swiftly he predicts that borrowing costs for Italy, Spain and Belgium will soar and then lead to default; a run on European banks will begin; that will precipitate a run on U.S. and Asian banks; a freezing up of credit markets will begin in Europe and then spread; mass layoffs and unemployment will spread through the global economy. Summing up the continent's problems, Blodget says "eventually, Europe will have to confront the fact that the current European Monetary Union just does not work in its current incarnation and will never work in its current incarnation, unless there is deep fiscal integration, which will be extraordinarily challenging."