THE EU needs to act quickly over the sovereign debt crisis to avoid recessionary blight for years to come.

Guy Hands (pictured), the private equity guru and Guernsey resident, made the bleak prediction at the Chamber of Commerce annual dinner.

He said decisive action needed to be taken but was unlikely from individual governments.

He believed that Greece should have been expelled from the euro but now the sovereign debt mountain was unsustainable and could plunge Europe into a 10-year recession.

‘Now we can only partly bail these countries out,’ he said, ‘we can ask them to put their house in order, none of them are willing to take the political pain of doing that, but will make some effort. ‘