A former aide to Margaret Thatcher says the eurozone is going to break apart as countries that currently use the euro revert to their old currencies.

Nile Gardiner, the Director of the Margaret Thatcher Center for Freedom at the Heritage Foundation and a former aide to Lady Thatcher, says, “I think we are looking at the likely breakup of the eurozone within the next few months,” with Greece exiting first, followed by Italy.  

Gardiner says a number of European governments are preparing printing presses to go back to their former currencies as a precaution -- as highlighted in today’s Wall Street Journal.  But Gardiner goes further, saying even European economic powerhouse Germany is gearing up the presses. 

“The Germans are always extremely cautious and I would not be surprised if even the German government has contingency plans in place for a return to the Deutsche Mark.”

But the Director of Financial Regulation Studies at the Cato Institute, Mark Calabria says, “I  don’t think it will break apart. There is no explicit process of how you get out. You are in a situation where it’s far more complicated to get out.” 

Calabria, who holds a doctorate in economics from George Mason University, adds, “I think they are going to do everything they can to resist seeing the euro area break up.”  

Calabria says the consequences of a euro collapse are too dire, although he expects countries like Italy, Spain and Portugal to default on their debts. 

“When Italy is at a point that it can no longer pay its debt you will have a default that leads to a number of bank failures around Europe, and you will be forced with a high potential of an essentially European TARP, bank bailouts,” he said. Calabria predicts taxpayers will be forced to bailout the failed banks in their individual countries in order to preserve the eurozone.

The question nobody can answer is what will happen to the value of the euro as countries transition to other currencies. Eurozone savers are withdrawing euros from their banks and purchasing US dollars, British pounds and Swiss francs, attempting to protect the value of their assets. 

“The big fear of savers across the eurozone (is that) the value of the euro will plummet,” according to Gardiner, and nobody knows how long it will last. “A transition to former currencies would in practice take several weeks to phase in but I would expect that many eurozone governments would have the printing facilities in place.”

The other question without answer is what happens to the US economy. Gardiner expects the short-term situation in Europe could significantly unsettle the markets in the United States in 2012 and “economic volatility is going to be a factor in the 2012 election. In the long run, America is better off with a Europe of sovereign nation states.”

Gardiner says the decision by British citizens years ago to keep the pound instead of adopting the euro was a smart one. “The euro -- the idea of a single currency -- is a political project and it is an artificial approach that goes against centuries of European history.”

Gardiner says frantic attempts to save the eurozone and the euro will actually have worse outcomes than letting the currency ride off into history. 

“I think we will see widespread impoverishment if the European leaders try to keep the single currency together,” he said  "It is best to let the markets work in Europe and the markets can’t function properly within the straight jacket of the single currency.”

Calabria disagrees and predicts the eurozone will muddle through the current crisis with more Band-Aid solutions that keep the eurozone intact. 

“At some point austerity will be forced upon (the citizens of eurozone countries) whether they like it or not. None of this requires them to leave the eurozone.”

Adam Shapiro joined FOX Business Network (FBN) in September 2007 as a New York based reporter.