Nouriel Roubini's Global EconoMonitor

Roubini CNN Davos Vidoes: Europe Needs a ‘Bazooka’, U.S Has 1929-Style Income Inequality

5 Responses to “Roubini CNN Davos Vidoes: Europe Needs a ‘Bazooka’, U.S Has 1929-Style Income Inequality”

EugenJanuary 26th, 2012 at 5:20 pm

It seems obvious that in the following years the P.I.I.G.S. countries will have to reduce significantly their public and private expenses. Since their represent almost quarter of the EU population this will have big impact on the demand for goods and services within the EU. While without demand will be NO economic growth EU, some other source of demand has to come from somewhere. The most reasonable source of such demand can come by increased investments and consumption in the EU countries with relatively low debt and potentially high perspective of economic growth. And i am not speaking about Germany, Scandinavia or Holland, but rather the Eastern European countries, with about same population as the P.I.I.G.S. countries, that on one hand have relatively low public dept, mostly bellow 50%, (except of Hungary), on the other hand in spite of being part of the European Union, have shamefully low standard of living and big deficit in infrastructure. For some unclear reason the governments in these countries are cutting the investments and expenses too. It is time to change this policy and allocate finances into investments in Eastern European countries. I am pretty sure, it is not only socially correct, but compared to any other alternatives, it will bring the highest yield on investment.

Aegean1972January 30th, 2012 at 10:58 am

Nouriel Roubini has been talking about the bazooka for a while now.

But EU leaders arent listening. They are playing a gambling-type of bet, that if it doesnt materialise, in the next few months, it could mean the slow break up of the euro-periphery. Greece is a very unstable part of the european equation. The problem that started in greece 2 years ago, was a european problem and not an isolated one (not a greek one).

A big bazooka two years ago could have stopped the fire from spreading all over the euro-periphery. They didnt act then and they arent acting now either. They are trying to stop the uncontrollable fire with "rain dances".

Until Greece defaults in the abyss and drags everyone along.