If Europe falls into a full tailspin - and/or the currency bloc breaks up - the U.S. economy will suffer greatly.

Which of the two currency blocs should the UK be more closely aligned to?

Austria, Holland and others are so closely integrated with the German economy that a northern currency bloc would quickly be born.

The disintegration of the 17-nation currency bloc would affect Europe and the "entire global financial system," he added.

This defies the point, and increases the chance of a credit crunch in the currency bloc this year.

In addition, there will be a new push to boost competitiveness among weaker economies and longer-term proposals to tighten economic governance across the single currency bloc.

I shall invite them to join us in putting the pound, franc and lira into a new currency bloc.

The President defends this approach as necessary to compete in the global economy as part of a powerful European currency bloc.

The single currency bloc currently has a temporary support mechanism for countries in trouble in the EFSF, which still contains around €250bn.

The European Commission believes a eurobond - collectively issued by the 17 members in the currency bloc - will calm market debt fears.