“Three Problems of Europe: Divergence, Indebtedness and Weak Banks”

More+Comment ♦ Published: May 21, 2012; 14:20 ♦ (Vindobona)

The new director of the Austrian IHS (Institute of Advanced Studies) Christian Keuschnigg thinks that a Greek exit would have to take place suddenly.

“Three Problems of Europe: Divergence, Indebtedness and Weak Banks” / Picture: © Institut für Höhere Studien - Institute for Advanced Studies

In an interview with the Austrian newspaper “Standard”, Keuschnigg explains the core problems of Europe. First, the high public debt is not only a problem in Southern European countries, but also in Northern countries. Second, the competitiveness is diverging enormously. In the South, wages grew much higher than productivity. This caused a rise in the current account deficits. In…