Renowned economist Joseph Stiglitz, warns that Europe’s debt problem could be detrimental to global economy.
Debt problems in both the United States and Europe represent the biggest risks for the global economy in 2013, Nobel prize laureate Joseph Stiglitz wrote in a newspaper article on Wednesday.
“In the outlook for 2013, the biggest risks for the global economy are in the US and in Europe,” Stiglitz wrote in a guest column for the business daily Handelsblatt.
But “the real risk for the global economy lies in Europe,” he warned.
“Spain and Greece are in an economic depression with no hope for a recovery. The eurozone’s ‘fiscal pact’ is no solution, and the European Central Bank’s bond purchase is a temporary palliative, at best,” Stiglitz wrote.
And the ECB must not impose further conditions for financial aid to countries, he continued.
“Otherwise, the medicine will lead to a deterioration in the patient’s condition,” Stiglitz argued.