By Simon Miller

As European markets continue their fourth day of losses, the Centre for Economic and Business Research (CEBR) has warned that a Greek exit would cost the global economy $1trn (£0.627trn).

In its latest report, CEBR's chief executive Doug McWilliams said a breakup of the single currency would cost around 2% of the eurozone GDP but a disorderly collapse would result in a 5% drop in output totalling $1trn in losses.

He commented: "The end of the euro in its current form is a certainty."

McWilliams added: "I told the Greek government two years ago in Athens that they had no option but to default and devalue. At the time this was an unusual view and I was attacked on prime time Greek TV by the leader of the Communist party as ‘irresponsible’ To be frank that didn’t worry me much – if the Communists think you are irresponsible you must be getting something right…Because of the failure to address the problems caused by the euro early enough these problems are now worse and the options have been reduced."

The latest crisis in the eurozone comes after the election of Francois Hollande as French prime minister and Greece failing to form a government.

France's new finance minister Pierre Moscovici, has repeated Hollande's demand that the EU fiscal pact will not be ratified unless growth strategies are added.

He commented: "What has been said quite clearly is that the treaty will not be ratified as is and that it must be completed with a chapter on growth, with a growth strategy. We must reorient the reconstruction of Europe, but not by turning our backs on budget discipline."

Meanwhile. former head of Greece's council of economic advisors George Zannias has been appointed caretaker prime minster as Greece goes to the polls again on 17 June.

However, there are fears that Greece will exit the euro before the elections leading contagion.

With depositors reported to have taken €1bn (£0.798trn) from Bankia, the part-nationalised bank, last week, Spain's prime minister Mariano Rajoy took to television to call for European leaders to back the so-called 'sinner states".

Speaking on state televisionm last night, Rajoy said there was "a serious risk we will not be able to borrow - or borrow at astronomical prices" unless they succeeded in bringing down the debt levels and regaining market confidence."

This morning, €2.49bn of Spanish debt was sold but bonds due in January 2015 saw a yield of 4.375%, up from April's auction of 2.89% while bonds due in July 2015 yielded at 4.876%, up from 4.037%. Bonds due in April 2016 hit 5.106%.

Rajoy added: "I would like a clear, strong message in defence of the euro project and an affirmation of the sustainability of the public debt of all the European countries that are subject to discussion at the moment."

The FTSE 100 was down 19.59 at 5,385.66 while the CAC 40 is down 3.57 at 3,045.10. The EuroStoxx 50 was down5.22 at 2,170.12 (09.50 BST).

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