Tags: John | Paulson | Europe | Manage | Debt Crisis

John Paulson: Europe Can Survive Its Debt Crisis

Monday, 24 May 2010 02:58 PM

Despite recent market turmoil Europe can manage its debt crisis, says John Paulson, head of hedge fund giant Paulson & Co.

Stock markets have plunged repeatedly and the euro has taken a beating on fears that Greece's debt crisis will spread to other countries like Spain and Portugal and threaten the global economy.

Not true, Paulson says, especially after European countries agreed to a $1 trillion package to prop up the European economy.

“We think that process is being managed well by the European authorities and it's unlikely to pose a systemic risk to the markets,” says Paulson, according to MarketWatch.

Even concerns that Spain may rock the European economy are unfounded, as Spain's debt-to-gross domestic product ratios are lower than those in Greece.

In fact, a weaker euro is making the continent more competitive, Paulson says.

“The market correction is a buying opportunity in the U.S. and European equity markets, in the face of the recovery we're likely to experience.”

In the United States, meanwhile, Americans should consider buying homes, as the market has bottomed out and prices are due to rise, Paulson says, pointing out that home ownership is the cheapest in 50 years.

Some, however, are skeptical of Greece and its ability to pay back the billions it owes in aid.

“Whether Greece over this time period is really in a position, to bring up the strength, I have my doubts,” says Deutsche Bank Chief Executive Josef Ackermann, according to Reuters.

The overall $1 trillion rescue package should help Italy and Spain but Portugal could be more problematic down the road, Ackermann adds.

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Despite recent market turmoil Europe can manage its debt crisis, says John Paulson, head of hedge fund giant Paulson Co. Stock markets have plunged repeatedly and the euro has taken a beating on fears that Greece's debt crisis will spread to other countries like Spain...
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2010-58-24
Monday, 24 May 2010 02:58 PM
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