Barry Eichengreen: Europe may go bust in 2014
According to Professor of Economics and Political Science, University of California at Berkeley, IMF former advisor Barry Eichengreen, the European economy is still reeling from the events of the past years, in particular, new problems seethe up because of huge government loans.
“It is too early to talk on the recovery of the European economy. The banking crisis is not over, combined financial overview will be ready yet in a few years, economic development also leaves much to be desired, remaining low. In addition, the results of the recent elections to the EU Parliament show that there is a political crisis in Europe, too,” said Eichengreen in an interview to German publication Der Spiegel.
Comparing the economies of Europe and the United States, the scientist recognizes the substantial growth of the latter. According to the expert, the data shows a decline in the US tax burden and increase of US citizens’ cash savings, which they can invest. In particular, the US Federal Reserve started to cut down monthly loan package, which has a positive effect on the economy.
“Maybe, if Europe makes the right choices, it will be able to survive another year, but there is also a strong likelihood that in 2014 everything will go bust yet again,” said Mr Eichengreen in conclusion.