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The European Crisis: Still in a Deteriorating Trend

10/11/12

In this CNN interview, Senior Fellow Liliana Rojas-Suarez explains that recent policy announcement, while in the right direction, do not imply that a solution to the European crisis is on sight. She emphasizes that only decisive actions by the European Central Bank involving not only provision of liquidity (and purchase of government bonds) but also heavy involvement in the restructuring of banking systems in Spain and other European countries will guarantee a credible and permanent solution of the crisis. Lacking these actions, Rojas-Suarez expects continuous volatility in the international capital markets and a deteriorating trend in the Eurozone’s economic fundamentals.