WORLD ECONOMIC FORUM:HARVARD ECONOMIST Kenneth Rogoff has said a restructuring of Ireland’s bank debt is probable, with wider debt cuts certain in Greece and Portugal.

His remarks came as a twitchy business and political elite departed their mountain-top retreat yesterday amid urgent calls for robust euro zone rules and a boost to financial rescue funds.

“That we are going to need restructuring in Greece and Portugal is just clear, probably also in Ireland, where it would be enough to do the bank debt,” said Mr Rogoff. “In Spain probably as well, if you include the private-sector debt and the big banks. Italy is a borderline case, where it may just be a liquidity issue.”

His remarks reflected concerns from Hong Kong to Mexico that the euro difficulties would cut 1 per cent or more from global economic growth this year.

At a farewell dinner, bankers and executives placed bets on the single currency holding together. The result, according to one attendee: a third believe the euro will not survive in its current form.

The ghoulish game followed gloomy crystal ball-gazing from US economist Nouriel Roubini. True to his “Dr Doom” reputation, he described the euro zone crisis as a “slow-motion train wreck”.

“Not only Greece, other countries as well are insolvent,” he said, predicting a deep recession in Europe and a 50-50 chance that the euro would break up in the next three to five years.

“Not all the members are able to stay. Greece and maybe Portugal may exit the euro zone, Greece within the next 12 months. Portugal may take a while longer,” he said.

With his gaze fixed on Greece, Deutsche Bank chief executive Josef Ackermann warned against “playing with fire” by speculating about a problem-free default and urged leaders to “do everything” to prevent euro zone collateral damage.

World leaders backed International Monetary Fund chief executive Christine Lagarde’s demand for an increase in the fund’s capacity to more than $1 trillion.

“Now is the time to act,” she said. “If [IMF funding] is big enough, it will not get used. And the same applies to the euro firewall for that matter.”

The US and the UK oppose her request, fearing this would ease euro zone reform pressure, though British chancellor George Osborne said he was prepared to compromise if the euro zone “show the colour of their money”.

Meanwhile, German officials, open to increasing IMF capital, say a larger bailout fund will lack credibility until further EU budget reforms are in the bag. Despite no official shift on any side, discreet talks in Davos helped leaders close the bailout policy gap.

At a closed-door meeting, European and US leaders discussed the possibility of a $1.5 billion capital fund to be agreed in April.

As the Davos show wound down, and attention shifted to Brussels, Britain’s Mr Osborne drew a positive assessment of the Davos think-in: “Actually, people are slightly more optimistic at the end of the week than at the beginning.”