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Tags: Roubini | Europe | Savings | Madness

Roubini Urges Europe to Stop 'the Savings Madness'

Tuesday, 12 June 2012 09:32 AM

Economist Nouriel Roubini wants Europe to quit austerity and saving and focus on lowering taxes and increasing salaries instead.

"The savings madness must be stopped. Governments must lower taxes and increase wages. Europe needs growth," Roubini told the German newspaper Bild, CNBC reports.

"The German government should give every German household a 1,000 euro ($1,250) travel voucher," says Roubini. "However, it should only be used for holidays in crisis countries. That will help boost growth there.”

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.

In addition, Roubini says that everyone who buys a holiday home in a southern European state should get a tax bonus.

Roubini believes that halting funding for Greece would cause the euro’s demise.

According to Roubini, the eurozone has only two choices: funding and facilitating an orderly exit by Greece or keep the country in the euro by financing it.

In Roubini's opinion, the second option would be cheaper in the long term for the German taxpayer than allowing the eurozone to break up.

The Chicago Tribune reports that a German central banker says that Athens must stick to austerity measures agreed under its bailout program to qualify for further financial help.

"The country needs to stick to the agreed austerity and structural reform measures — no ifs, no buts," German central bank board member Andreas Dombret said, according to the text of a speech to be delivered in London.

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.


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