IMF managing director Dominique Strauss-Kahn spoke to Bloomberg Television today about the situation in Europe, pointing out the difficulty in the region’s banking system, the lack of a comprehensive approach to dealing with the problem, and the underlying low growth problem facing Europe.
From his comments:
“The problem is, [European growth] is stable at the low level. The real problem is…a rather long period of low growth in Europe. Even in Germany where growth is at the higher level, but not that high. So the real problem that the Europeans are facing is..a sluggish recovery and low growth for maybe five, six, seven, maybe 10 years. That’s what they really have to address, in terms of boosting innovation, credit. That is why repairing the financial sector is so important because without this kind of repair there won’t be credit flows to SMEs and as a result, there won’t be jobs. The real threat is a recovery without jobs.”
Watch the full video here: