Portes urges euro action

London Business School Professor of Economics Richard Portes has joined forces with other leading European economists in warning that action must be taken immediately to save the euro.

Professor Portes, the founder and president of the Centre for Economic Policy Research (CEPR), has put his name to an open letter urging EU leaders to take decisive action on the eurozone crisis.

The letter stresses that the very survival of the euro is at stake, with the debt crisis now spreading to Italy and Spain and the credit worthiness of more than a third of the Eurozone being challenged.

The economists encouraged leaders to support their proposals to expand the European Financial Stability Facility (EFSF), to ensure that banks are strong enough to withstand a default by Greece.

The group said that the EFSF should also be allowed to operate in secondary bond markets and be given operational flexibility and independence.

The letter was composed by 13 economists, including Richard Baldwin of the Graduate Institute in Geneva and Daniel Gros of the Centre for European Policy Studies in Brussels.