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Economy
In reply to the discussion: STOCK MARKET WATCH -- Tuesday, 20 November 2012 [View all]xchrom
(108,903 posts)21. Interview with Economist Hans-Werner Sinn 'Temporary Euro-Zone Exit Would Stabilize Greece'
http://www.spiegel.de/international/europe/economist-sinn-warns-against-current-euro-crisis-course-a-868005.html
SPIEGEL: Mr. Sinn, Chancellor Angela Merkel feels as though economists have left her in the lurch. She once said that the advice that she receives from economists is "about as diverse as it gets." Can you see where she is coming from?
Sinn: No.
SPIEGEL: Excuse me? Economists have completely different ideas about how the euro can be saved. You suggest, for example, that countries should temporarily leave the euro zone until they have re-established their competitiveness. Others, by contrast, recommend collectivizing debt across the euro zone. How should politicians deal with such contradictory advice?
Sinn: There are differences in the recommended therapies, but fewer divergences in the analysis. There is considerable agreement today on the euro's defects.
SPIEGEL: But not on how the euro can be saved, or even whether it should be.
Sinn: I hope that it can be fixed. The euro crisis proceeds in phases, and we are always told that there is no alternative to the next phase, because otherwise the euro would crumble. So there was supposedly no alternative when the European Central Bank (ECB) granted its TARGET loans, when it forced the German central bank, the Bundesbank, to purchase sovereign bonds from Southern European countries against its will, and when increasingly larger rescue funds were approved. Now, they are planning to create a banking union to socialize the debts of banks in Southern Europe. The next step will be the introduction of euro bonds
SPIEGEL: Mr. Sinn, Chancellor Angela Merkel feels as though economists have left her in the lurch. She once said that the advice that she receives from economists is "about as diverse as it gets." Can you see where she is coming from?
Sinn: No.
SPIEGEL: Excuse me? Economists have completely different ideas about how the euro can be saved. You suggest, for example, that countries should temporarily leave the euro zone until they have re-established their competitiveness. Others, by contrast, recommend collectivizing debt across the euro zone. How should politicians deal with such contradictory advice?
Sinn: There are differences in the recommended therapies, but fewer divergences in the analysis. There is considerable agreement today on the euro's defects.
SPIEGEL: But not on how the euro can be saved, or even whether it should be.
Sinn: I hope that it can be fixed. The euro crisis proceeds in phases, and we are always told that there is no alternative to the next phase, because otherwise the euro would crumble. So there was supposedly no alternative when the European Central Bank (ECB) granted its TARGET loans, when it forced the German central bank, the Bundesbank, to purchase sovereign bonds from Southern European countries against its will, and when increasingly larger rescue funds were approved. Now, they are planning to create a banking union to socialize the debts of banks in Southern Europe. The next step will be the introduction of euro bonds
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