Warren Buffett: Euro's Collapse Is Not Unthinkable

Warren Buffett told CNBC Thursday that the collapse of the euro zone's single currency is far from "unthinkable."

"I know some people think it's unthinkable...I don't think it's unthinkable," Buffett said in an interview.

Still, Buffett said he believes there will be "huge efforts" put forth to preserve the euro. In the meantime, struggling peripheral countries like Portugal must find a way to resolve fiscal crises.

"You can't have three or four or five countries that are in effect free-riding on the other countries. That won't work over time-they have to get their fiscal houses in reasonable harmony," he said.

The widely-watched investor spoke as yields on Portuguese bonds soared to new highs and markets remained alert for a potential European Union bailout of the troubled nation. Late Wednesday, Portugal's prime minister stepped down after the country's parliament rejected a fiscal austerity plan proposed by his government.

Buffett's comments didn't affect the euro. In fact, the European currency extended its gains against the dollar after data showed an unexpected decline in orders for U.S. durable goods, casting some doubt on the strength of the American economy.

For now, Buffett said Europe's fiscal woes won't have a huge impact on the businesses under his holding company Berkshire Hathaway (NYSE: brk'a), noting that "currencies have been fragile things for centuries."

"It isn't the end of the world, but alot of adjustment would be needed if the euro proved to be in real trouble," he said.

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