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Economy
In reply to the discussion: STOCK MARKET WATCH -- Monday, 1 October 2012 [View all]xchrom
(108,903 posts)52. European solution to euro crisis is 'wrong' -- stiglitz
http://www.irishtimes.com/newspaper/finance/2012/1001/1224324667785.html
?ts=1349098595
GOVERNMENTS HAVE misdiagnosed what went wrong in the euro zone and are also advocating the wrong solution to the crisis, Nobel economics laureate Prof Joseph Stiglitz told the opening of the International Bar Association conference in Dublin last night.
The answer being proposed to the crisis was austerity which has almost never worked, he said.
It was tried in 1929, the IMF tried it in Asia and Latin America. Each time it succeeded in turning downturns into recessions, recessions into depressions.
He pointed out that Europes debt-to-GDP ratio is less than that of the US, and noted the US can borrow at almost negative interest rates. The fundamental problem in Europe was that the euro was a flawed currency arrangement that did not meet the conditions needed to establish a common currency. A structural change of the euro arrangement was needed. It was happening now, but too late for the economics of the situation.
?ts=1349098595
GOVERNMENTS HAVE misdiagnosed what went wrong in the euro zone and are also advocating the wrong solution to the crisis, Nobel economics laureate Prof Joseph Stiglitz told the opening of the International Bar Association conference in Dublin last night.
The answer being proposed to the crisis was austerity which has almost never worked, he said.
It was tried in 1929, the IMF tried it in Asia and Latin America. Each time it succeeded in turning downturns into recessions, recessions into depressions.
He pointed out that Europes debt-to-GDP ratio is less than that of the US, and noted the US can borrow at almost negative interest rates. The fundamental problem in Europe was that the euro was a flawed currency arrangement that did not meet the conditions needed to establish a common currency. A structural change of the euro arrangement was needed. It was happening now, but too late for the economics of the situation.
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