MOST global investors expect Ireland to default and believe that at least one country will leave the euro within five years, according to a survey published yesterday.
As chief executives, politicians, U2's Bono and Dublin Archbishop Diarmuid Martin gathered in Davos for the World Economic Forum's annual meeting, 53pc of respondents in a Bloomberg poll said Ireland would probably default while almost three-quarters forecast Greece would.
A majority also believe one or more of the 17 countries in the eurozone will leave the currency by 2016 and one in nine see a country exiting within 12 months.
The pessimism underscores the urgency that German Chancellor Angela Merkel and French President Nicolas Sarkozy face in their hunt for new ways to placate investors after almost $1 trillion in emergency financial support failed to calm markets.
Europe's problems are high on the agenda for the conference at the Swiss ski resort where Ms Merkel, Mr Sarkozy and ECB president Jean-Claude Trichet are among the 2,500 officials, bankers and economists attending.
"The problems in Europe have been addressed, but only with a band aid," said Ted Jarvis, senior vice-president at the Indiana Trust Company in Anderson, Indiana.
"Several euro members have not followed the correct policies and dug themselves a deep hole," he added.
New York University professor Nouriel Roubini told the forum's opening session yesterday that "what's happening in the eurozone is one of the biggest risks to the global economy".
Respondents were almost evenly divided about whether the euro area would eventually collapse. Most of the 45pc who anticipated a breakdown said it wouldn't occur in the next five years while 48pc said it would never happen.
Respondents were also divided over whether Portugal would default, while a majority expressed confidence in Spain.
As well as the majority predicting a euro-region member withdrawing within five years, another 13pc said a country would leave after that. Just under a quarter said the region would remain intact.
Almost half of the euro-area poll participants said the currency bloc would keep its current form, four times as many as in the US.
Corrado Passera, chief executive officer of Italian bank Intesa Sanpaolo, said in an interview with Bloomberg television yesterday that there is a risk of sovereign default in Europe.
"The risk is there," Mr Passera said. "We have to do our best to avoid it. I believe it is within our reach, the possibility to avoid those defaults. If they happen we can manage them, but we should really avoid them."
Nariman Behravesh, chief economist at consultants IHS in Lexington, Massachusetts, who is attending the Davos meeting, said: "More likely than a break-up and more urgent is the need for some countries to restructure their debts.
"It is going to happen sooner rather than later."