In the aftermath of the Euro crisis, Europe is facing what could turn into a decade long period of stagnation, leading experts say. The necessity of reducing the public debt will dampen growth for the foreseeable future, said Thomas Wieser, Chairman of the Eurogroup working group at the EU Council of Ministers, at a United Europe discussion in Munich on June 24. Wieser added that it was essential to boost public investment, but it would demand the political will to cut expenditure in other areas.
Marcel Fratzscher, President of the German Institute for Economic Research in Berlin, largely agreed with Wieser’s analysis. He spoke of three crises that Europe had to face: a crisis of public debt, an economic crisis and a crisis in the banking sector. Contrary to most peoples’ beliefs, Europe’s currency union was not at the origin of the problem – on the contrary. “The Euro guaranteed that the crsis actually didn’t get a lot worse,” Fratzscher said.
For more details, please see United Europe’s report in German.