"We think today's financial and economic backdrop provides the first serious test to the structure and credibility of the euro and we fear it could be found wanting," wrote analysts from CitiFX in a report released Thursday.

The euro was down 0.0264 to 1.3488 on Monday.

French authorities have tried to lead a co-ordinated financial rescue effort - something similar to the U.S. actions - but it proved impossible to get leaders from the 15 member countries to agree.

Instead, each country will act to shore up its domestic situation. Ireland was the first to act, and it took the extraordinary measure of insuring all bank deposits and the senior and subordinated debt of its six largest banks.

Ireland's move prompted fears that depositors in other European countries would move their funds to Irish banks to take advantage of the safety. Greece and Germany then followed with a similar guarantee on deposits.

Elsewhere, governments have put together a variety of bank bailouts but different countries have differing fiscal situations.

"You have piecemeal decisions being taken on a case-by-case basis by individual governments to address their individual woes," wrote CitiFX analyst Tom Fitzpatrick in the report.

Fitzpatrick suggests the euro could be imperiled by bailouts, deficits and human nature.

Ireland was widely chastised by other euro zone countries after the move but policy-makers there said they were acting in the country's best interests. Ireland benefited greatly from adopting the euro but Fitzpatrick said the country won't want to share in the downside.

"When times get bad all people are concerned with is how to get them better. They are not interested in being told how good they used to have it," Fitzpatrick said.

"The only thing unthinkable is that anything is unthinkable and I for one do not believe that the idea of a world in the future without a Euro is unthinkable. Even if that is not the case it has to be obvious that the European structure is not equipped to deal with the potential stresses in the pipeline and this could spell a dramatic turn in fortunes (negative) for the euro," Fitzpatrick added.

By Adam Button, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it

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