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Studio Guest: Jan Hagen, Expert on Financial Markets | Made in Germany
Posted
September 21, 2011
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September 21, 2011
361
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3:41Now PlayingOur first studio guest today is Jan Hagen, an expert on financial markets from the European School of Management and Technology.
DW-TV: For some answers, we've got Jan Hagen with us... a professor of banking. Are the lenders running around with their hands in the air right now, screaming?
Jan Hagen: It seems so, and they have some justification. The news we got from Greece, isn't really encouraging, and I think investors are right to be nervous. There's no clear strategy visible from the EU members.
DW-TV: But, wouldn't you say that Greece's bailout deals are in effect a bailout for the banks?
Jan Hagen: Definitely. There are two crises - the sovereign debt crisis and also a banking crisis. I think politicians shied away from this for some time, because it's very unpopular dealing with the baking issue for a second time. But really that's what is required.
DW-TV: What do you think is the right thing to do? Let Athens default on its debts?Jan Hagen: The question is: what's the alternative? I think the levels of debt that we see with the Greek economy are unsustainable. Greece needs to get rid of some of its debt, and it may also have to leave the euro, because under the current terms the Greek economy will not gain competitiveness.
DW-TV: Is Europe able to withstand a move like that?Jan Hagen: Again: what are the alternatives? They have to face realities and take some hard measures. That could mean a default by Greece, and it could mean a bailout of banks.
DW-TV: Standard& Poor's has downgraded Italy's credit rating. What are the consequences there?
Jan Hagen: It has been anticipated on the market that the Italian economy is weak - and what Standard& Poor's is trying to say is that the budget cuts efforts are not enough. They soften the initial measures and the political situation is Italy is not very stable - and they made it clear to investors that they're concerned about the situation.
DW-TV: What has to made clear to the politicians. They seem to be totally missing the point.Jan Hagen: I think they have to face the reality that the first concept of the euro is unsustainable. We have diverging economies, we have national politics with regard to sovereign debt. For the euro we need a unified economic policy, and that is not on the horizon yet. And that's why we're seeing this huge tension with the euro - and that could mean we will see some members departing the euro.
DW-TV: And is this going to see a shift inglobal economics, with other nations at the moment on the rise?
Jan Hagen: Let's put it one way. The nations that we see rising right now have to a degree been in similar trouble in the past, and they took some tough measures - and they also asked their creditors for a write-down on the debt level. And that in the end helped their economies to get on their feet again. If you take these levels and apply them ot the euro, I think there could be some lessons learned.
DW-TV: Jan Hagen, thanks for your time.
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