Paul Donovan: There Will Be 5 Years Of Rolling Crisis In Europe19 October, 2011, 23:31. Posted by Zarathustra
Tags: Big Swinging Dick, Economy, Euro Crisis, Europe, Paul Donovan, UBS
Paul Donavan, economist at UBS and eurosceptic, spoke to Bloomberg TV. While I have been genuinely bored by the Euro crisis, he tells us to be prepared to be bored for 5 years, as he said that “We are going to have 5 years of rolling crisis in the Eurozone… we will end this crisis, maybe by Christmas, or perhaps by January. And then we can pause a bit, we can relax. And then we will have another crisis, which could be Spain, it could be France, you pick a country. There’s no shortage of crises in Europe”. And as we have observed for a while, the market has not been really treating France as AAA rating (obviously), as we have seen French-German yield spread reading a record.
Although we mostly agree that politicians are messing around and not solving the problem, of which Paul Donovan agrees with that judgment, he said some shocking things: “The problem that we’ve got with the Eurozone at the moment is that this is entirely political. In a perfect world, everything would be run by economists, and we’d have rationality and everything would be fine. But this isn’t a perfect world. We’ve got politicians trying to run things, trying to play it, running the economies, and we get random actions.”
Well, while politicians are making things worse, I am not sure if economists would make things better. And by the way, Margaret Thatcher (former Tory Prime Minister of the UK) once told the fictional civil servant Sir Humphrey Appleby to abolish economists (that’s a joke, of course).