A leading finance and economics academic at Yale University and Author has revealed at the European Unions (EU) bailout of Greece is like feeding a drug addict, which is not helping the country or the EU in the long term.
We have too much debt and the way regulators and the EU have responded to the situation is by giving more, which needs to be fundamentally addressed, said Dr. Vikram Mansharamani,Lecturer at Yale University and author of Boombustology when speaking at the GAIM 2011 conference in Monaco. It is like feeding a drug addict where it is no good for anyone. That will only mean they will come back for more.
Currently, Greece is facing another pivotal point in its political and economic history. Prime Minister George Papandreous new government needs to secure the necessary Parliamentary support in a vote at midnight tonight, in order to pass a new austerity bull by the end of June 2011. This is especially important as it is a demand from international creditors.
Greeces austerity plans would include more tax increases and spending cuts, which has to be passed by parliament, if Greece is to receive the next 12 billion instalment of its total EU bailout amount of 110 billion.
In addition to this major reason, Mansharamani said that the investment bubble in China is unsustainable and which is why he is bearish on the world not being in a double dip recession.
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(LB)