Famous economist Nouriel
Roubini said that there is a chance that Greece will not exit the eurozone in the near future although the bloc will need to transform into a
transfer union to keep it.
Furthermore, Roubini
commented that in order for Greece
to be in the eurozone, there has to
be a transfer union, a realization that the problems of the country are
long-term and that it will take ten to twenty years to do the reform and
austerity to stabilize Greece. He
added that if anyone is willing to do such things for the sake of not splitting
the euro zone, then Greece stands a chance.
Such words are a turning point for the pessimistic
comments of Roubini, who back in
July 2012 said that Greece would exit the eurozone in 2013.
According to the bearish economist, less that 50 per
cent is the probability of a Greek exit.
That change over the summer as interest rates on
Italian and Spanish sovereign bonds were extremely high. Mario Draghi, the president of the ECB promised to protect the euro, austerity was carried out by Greece, the eurozone approved its ESM
bailout facility and also the
European Central Bank had a plan connected to conditional bond buying.
Still, Nouriel
thinks that a shift in Germany’s
attitude was the clincher. He said that if Germany
had realized that if there was a collapse of the euro, the damage and the loss would not be just for Greece and other countries but it would
also be for it and as a creditor, it would see its government shoulder and financial
institutions the burden of bankruptcy.
Roubini added that another factor is the upcoming election in
Germany which will take place in
2013 and if Greece goes down, Cyprus
will too which will lead to tensions with Turkey.
Dr. Doom, as Roubini
is often called, is of the opinion that the bloc is focused mainly on austerity
and that the eurozone has not made
GDP demand and job creations its top priorities.
Moreover, he added
that if things were in his hands, he would put off the fiscal austerity and do it more gradually.
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