STACEY VANEK-SMITH: German chancellor Angela Merkel said today the European debt crisis could be Europe’s “most difficult hours since World War II.” And now we have word the British government is creating contingency plans in case the Euro breaks apart.

Christopher Werth has more from London.

CHRISTOPHER WERTH: Until now, you’d have been hard pressed to find a politician willing to admit a break up of the euro was even possible. Germany and France have repeatedly denied they were drafting emergency plans.

But the British government now says it’s officially anticipating what a collapse of the Euro could mean for trade and the country’s banks. Peter Hahn of the Cass Business School in London says he doesn’t think the U.K. is alone.

PETER HAHN: I would assume that certain people in the central bank and in the government in the U.S. are trying to contemplate how it could affect them. Unfortunately for all of us, we don’t have a lot of experience with people changing currencies suddenly.

For example, he says financial systems could come to a screeching halt, as banks scramble to do the math on how much a loan in Euros would be worth in Drachmas, print new paper money, and grow very leery of lending to each other.

And in that case, he says central banks like the Federal Reserve should be prepared to pump even more money into the banking system.

In London, I’m Christopher Werth for Marketplace.