Hans-Werner Sinn, president of the Munich-based Ifo economic institute, said supplying southern European countries with continued, cheap, public credit will lead to a infirmity if not to a complete economic collapse in Europe, Handelsblatt said.
When the euro region becomes the central administrator with investment management carried out by the state, the system can’t work because it prevents the capital market from being the important economic driver, Sinn wrote in a guest commentary in the German newspaper.
The European Central Bank is causing private capital to flee countries such as Italy and Spain because it offers cheap credit, Sinn wrote in Handelsblatt.
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