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Monday, June 11, 2012

Roubini : Germany has failed to grasp the historical dimension of the European crisis

Germany has failed to grasp the historical dimension of the European crisis, warn economist Nouriel Roubini in an Financial Times oped with British historian Niall Ferguson "Berlin is ignoring the lessons of the 1930s". On the urgent need of an EZ banking union "The more a disorderly Greek withdrawal from monetary union seems probable, the more the pressure on Spanish banks will increase. This could unleash a bank-run so serious that it could overwhelm the European Central Bank. A major re-nationalisation of the banking system has already begun in Europe. This process could lead the Union toward towards total disintegration."
"For that, growth must be stimulated in the eurozone and an excessive austerity policy abandoned. The ECB must ease its monetary policy, the euro must weaken and fiscal incentives must be established. We need infrastructure programmes and salary hikes in key countries to stimulate consumption." - via presseurop.eu
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Nouriel Roubini nicknamed Dr. Doom and lately Dr. Realist by CNBC , is a professor of economics at the Stern School of Business, New York University and chairman of RGE Roubini Global Economics, an economic consultancy firm . Prof. Nouriel Roubini A world-class economist who offers an unflinching look at the global meltdown and distinctive insights into its course going forward. His research on financial crisis in emerging economics has yielded a unique and now vindicated approach to future collapses. Roubini speaks on the global economic outlook and its implications for the financial markets. From his analysis of past collapses of emerging economies, he has identified common factors that support his predictions of crisis in the US and world markets. He has held several high-level advisory positions in the US government and international finance organisations, published numerous policy papers and books on key international macro-economic issues and is regularly cited as an authority in