The famous US economist Nouriel Roubini “strikes back” after his hilarious Tweet saying the Euro 2012 could turn into Drachma 2012, suggesting that growth in Greece could be improved if German tourists were given money to visit Greece for their summer holidays. Perhaps he was only expressing wishful thinking.
With his proposal, Mr Roubini advises Angela Merkel to provide her people with motives to visit Greece, thus boosting its economy. In particular he suggests that every German household be granted a €1,000 travel voucher so that it can plan its holidays in countries facing economic dire straits, such as Greece, Spain and Portugal. He also suggested Germany should introduce tax breaks for people who buy vacation homes in Southern Europe.
In statements published by the German magazine Spiegel, Roubini argued that European leaders should either take steps to keep Greece in the euro zone by helping it to build its economy as Germany had done with the former East Germany after reunification, or provide for an orderly Greek departure from the Union by extending Athens financial support. Both options would be cheaper for German taxpayers than letting the Eurozone break up, he said.
Roubini has also reiterated his warning that time is running out. Pulling the plug on Greece will provoke the “total collapse” of the eurozone, he told the German mass-circulation daily Bild in an interview published Tuesday. If Greece collapses, many investors will panic, causing a run on the banks in Portugal, Spain and Italy, said the economist, who earned the nickname “Dr. Doom” by correctly predicting the US sub-prime mortgage crisis.
Roubini said the “obsession with austerity” had to end, arguing that governments should lower taxes and raise wages. “Europe needs growth,” he said.