EU finance ministers, who will meet in Brussels on Tuesday, will seek to kill suggestions that the euro is heading for a break-up. But analysts say they are unlikely to prevent further weakness for the single currency, which has been undermined by a lack of political direction in the EU after last week’s referendum “no” votes in France and the Netherlands.

Speculation about a euro break-up intensified when an Italian government minister mused publicly about the return of the lira, and Stern, the German news magazine, reported that Hans Eichel, the German finance minister, and Axel Weber, the Bundesbank president, had discussed the break-up of monetary union with independent economists.

Both were quickly played down and German political and business leaders stressed their commitment to the euro. But the reports, in the frenzied political atmosphere after the French and Dutch rejections of the EU constitution, heightened doubts about the single currency’s long-term future.

One of the economists who met Eichel and Weber, Joachim Fels of Morgan Stanley, the investment bank, wrote a report last year called “Euro wreckage?” In it he warned that political disunity in Europe “could even lead to secession as some countries decide that the benefits of re-introducing a national money outweigh the costs”. The legal and technical barriers to leaving the euro were “lower than generally assumed”.

A report last week from Charles Stanley Sutherlands, the stockbroker, put a 50% probability on at least one country leaving the euro by 2008, and said that its complete collapse by 2020 was “inevitable”.

Most analysts say talk of a euro break-up is overdone, and that the 12 members of the eurozone are politically and economically committed to it. But worries about the euro have begun to hit European bond markets as well as the currency itself.

Analysts warn that destabilising anti-euro sentiment could re-emerge in the run-up to Germany’s elections in September.

The referendum results and weakness of the eurozone economy will increase pressure on the European Central Bank to cut interest rates from the present 2%. But Jean-Claude Trichet, the ECB president, made clear last week he was not hinting at an early change in rates.

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