"I know some people think it's unthinkable...I don't think it's unthinkable," Buffett said in an interview.

Still, Buffett said he believes there will be "huge efforts" put forth to preserve the euro. In the meantime, struggling peripheral countries like Portugal must find a way to resolve fiscal crises.

"You can't have three or four or five countries that are in effect free-riding on the other countries. That won't work over time—they have to get their fiscal houses in reasonable harmony," he said.

The widely-watched investor spoke as yields on Portuguese bonds soared to new highs and markets remained alert for a potential European Union bailout of the troubled nation. Late Wednesday, Portugal's prime minister stepped down after the country's parliament rejected a fiscal austerity plan proposed by his government.