Former U.S Treasury Secretary Larry Summers said he’s optimistic that the U.S. will avert the fiscal cliff of tax hikes and spending cuts set to take effect in January as the alternative would probably be a recession.
“I am optimistic in part because the alternative is so grim,” Summers said in an interview with Dublin-based broadcaster RTE today. Summers said that both Republicans and Democrats in the U.S. are “posturing” on the issue, though ultimately he expects U.S. will do the “right thing.”
Summers said that European Union leaders need to do more to provide assistance to countries with unsustainable debt and nations still facing “untenable” interest rates in bond markets. There is also too much emphasis in Europe on austerity over growth, he said.
“The instincts are in the right direction but the actions aren’t sufficiently concrete to get ahead of what I think are still gathering storms if more isn’t done,” he said.
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