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Stiglitz | A possibility of a Grexit is scary


Stiglitz | A possibility of a Grexit is scary

In an interview with Italian newspaper La Repubblica the American economist and Nobel laureate Joseph Stiglitz, commented in the adverse effects of a Grexit but also on the attitude of the European countries.

“Knowing that the euro is not irresistible will irreparably harm both the ECB and the European rulers. At a first speculative attack, rates on Eurobonds would balloon to exceptional levels, starting with the weakest countries, such as Italy. And that in this case there will be an attack and a crisis deeper than the previous ones, is inherent in the capitalist societies” he said.

As regards the attitude of Germany, the internationally renowned economist notes:

“The level of unconsciousness that has spread, especially in Germany, is scary. Some even say, loosely, that the markets have already paid the rupture of the euro and, indeed, that the exit of Greece would be something positive for the Monetary Union. I see it as insanity, same if not greater than the blindness that prevailed in addressing the crisis of Lehman Brothers, in September 2008 “.

About Italy, Joseph Stiglitz notes that “what is missing is demand, which continues beeing compressed due to the direction that Germany has followed, the obsession with austerity.”

Then the American economist returns to Greece and says:

“Years of austerity do not seem to have taught anything, with the unrealistic goal of Greece reaching a primary surplus of 4.5%. Europe lost a decade and is in serious danger of losing another, as long as it is satisfied by a growth of 1%. “