Europe Economy

Concept of the euro is 'fractured': Dallara

Euro zone's 'fault lines' revealed: Charles Dallara
Euro zone's 'fault lines' revealed: Charles Dallara

Charles Dallara, former Institute of International Finance CEO and managing director, said Monday that the past weekend has shown that the concept of the euro is essentially "fractured."

"I'm afraid that this weekend had revealed the fundamental fault lines that lie underneath the euro zone, indeed now I think that lie underneath the entire European Union," the vice chairman of the Partners Group told CNBC's "Squawk on the Street."

After Greece and euro zone leaders endured 17 hours of negotiations Sunday, a reform-for-aid deal for the debt-stricken country was reached early Monday. However, the pressure is now on Greek Prime Minister Alexis Trsipras to rush six sweeping reform measures through the Greek parliament by Wednesday before any more cash can be unlocked.

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"This program that they agreed to last night is tougher than the one put on the table and offered to them two weeks ago," Dallara said. "The banking system and the economy are in a much weaker state now, and I'm afraid that there are no realistic near-term hopes for the Greek people and the Greek economy, not withstanding that a deal could be done."

The Greek debt crisis has led to two important trust issues, Dallara said, "Can the rest of Europe trust Greece and can the rest of the world trust the European commitment?"