Economist Nouriel Roubini, the man who had been pushing Greece to exit the euro area for two consequent years, made a U-turn. “Stop supporting Greece would cause the euro zone to collapse” Roubini said in an interview to German daily BILD. He warned that a Greek exit would also trigger a bank run in Italy, Spain and Portugal. Who pulls the plug on Greece provokes a total euro zone collapse.
Roubini’s solution proposal looks like that:
Roubini: “One should either financially support an orderly Euro exit for Greece, or one should keep Greece in the euro zone and finance the economic growth as one did 20 years ago with the German reunification. Both solutions would be cheaper for German tax payers than letting the Euro zone to break down.”
Roubini stressed the dangers for Germany, should the EZ fall apart.
Roubini: “Without the Euro Germany is an economic and political dwarf in comparison to USA and China. As an export country Germany needs the euro and the European countries as trade partners. Therefore, either swim together or sink together.”
Further, Nouriel Roubini proposes that the Euro has to be weakened in comparison to US-dollar in order to boost competitiveness in the European South. He oppposes the German ‘savings policies’.
Roubini exhausted by his own past proposals
“Europe needs growth. Governments must lower taxes and increase salaries,” proposed Roubini overturning the German, EU and IMF austerity formula of tax increases and salary decreases.
Roubini: “German government should give every German household a 1,000-euro Vacation-Voucher. This voucher should be spent only for vacations in crisis-countries, in order to boost the economy there. There should also be a tax-bonus for everyone buying a vacation home in the countries of the South.”
PS solutions can be so easy under the Domino effect and threat… 🙂