ROME (Bloomberg) - The break-up of the euro area would save the 16-nation region from years of economic stagnation by boosting weaker members' competitiveness as well as domestic demand in Germany to spark growth, Capital Economics said.

"The threatened breakup of the euro zone, which many see as a potential disaster, would actually open the door to renewed economic growth, not just for weaker members of the zone, but for Europe as a whole," Capital Economics analysts including Roger Bootle in London said in a report released on Saturday.

Greece's debt crisis has driven down the euro and forced governments from Spain to Italy to embrace austerity measures and cut their deficits, clouding the outlook for recovery from the worst recession in six decades. The International Monetary Fund on July 8 kept its forecast for one percent growth this year in the region, which expanded 0.2 percent in the first quarter.