Nouriel Roubini, professor of economics at New York University and consultant at the U.S. Congress, estimated that the only solution for the restoration of the Greek economy is the devaluation of its currency. This means leaving the Euro zone and going back to the drachma. He explained that this is not feasible since it presupposes withdrawal from the EU, and pointed out that in such an eventuality, the devaluation of the currency, would rise to 50%.
The famous economist considered that no matter how the budget harmonisation in Greece will be correctly made, the country will not solve the huge state debt problem.
On the contrary this debt sharpens this problem since it damages the growth. Introduction of taxes leads to recession and leaves the country in high debt trap, the professor explained.
Roubini considered that the only solution for Greece to return part of the lost competitiveness is to devalue its currency.
Nouriel Roubini met with Greek PM Papandreou today. The two men have a long personal relationship.
See all the latest news from Greece and the world at Greekreporter.com. Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!
