Stiglitz calls on the authorities in the euro area to mutualise public debt

The Nobel prize and U.S. Corresponding to the Real Academia de Ciencias Económicas y Financieras of Spain (RACEF) Joseph Stiglitz has called this afternoon in Barcelona eurozone's authorities to mutualise debt to reduce interest rates and recovering economic growth. "Even the strongest countries of EU are into recession, indicating that the austerity policies promoted by Germany have proved a complete failure -Stiglitz considered-, the only solution is that all euro area countries will endorse between them, to constitute a common banking system with deposit insurance and, above all, to change the austerity policies by other stimulus to growth".

Invited by the RACEF, Stiglitz offered his solution to the European crisis in the talk "Why austerity does not work: policies for sustainable and equitable growth in Spain and Europe", which featured in the EspacioCaixa Palau Macaya, La Caixa Foundation headquarters. The Nobel was particularly critical of Germany, accusing it of evils by passing the EU economy and even invited to leave the Union if it does not exercise leadership for the common good. "When Germany into recession in 2013, as indicated by the forecasts, just change its economic policy and commitment to growth, though hardly abandon the discourse of austerity for the outside-reflected. If Germany is not ready to lead the EU benefit of all would be better to come out and do so Greece or Spain".

Furthermore, Stiglitz expressed concern over the high rates of unemployment that are occurring in countries like Spain. "It is a problem in the short and long term, because it is sacrificing the human capital of a generation and that should bring the country out of the crisis are leaving".

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