The "lunacy" of the euro and its "inevitable" end may improve the funding position of UK pension schemes, economist Roger Nightingale has said.
Speaking at the Pensions Management Institute's autumn conference, the economist said the decision to create a single eurozone currency was a bad one, as there was not required level of political unification in place.
As a result, he said the euro would inevitably disintegrate as "all lunacies eventually go wrong".
Nightingale said EU countries have yet to devalue because "they feel they will get a bail-out from Germany".
However, he added that Germany is unlikely to pump funds into the failing economies of Spain and Greece as their intervention in former East Germany had led to almost two decades of modest economic performance.
Nightingale predicted European countries could see inflation of about 0% by the end of 2013, but this could lead to opportunities for investments in bonds and equities to provide higher returns in real terms, which could improve pension schemes' funding positions.
He added: "The Euro will disintegrate, but that could be good for pensioners. It will increase the level of volatility in the market, but that is not necessarily a bad thing.
"A lot of people think risk and volatility are the same thing, but they are not. An increase in volatility can be positive."
Nightingale also warned European economies are heading towards a depression that could last 20 or 30 years, as opposed to recessions that are "a normal part of business".
However, he said that despite market performance in the 1930s depression, pension equity rose "quite nicely" during the decade.
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