Professor Victor Norman from the Norwegian School of Economics said Europe’s panic mode is as much attributable to Merkel as it is to Italian debt outweighing helter-skelter Greek, Spanish and Portuguese bonds.
“Had everyone followed Mrs. Merkel’s wish and not gone into debt, then there wouldn’t be anyone left to buy goods,” Norman said.
He added that there wasn't sufficient demand across Europe, and that a financial crisis package wasn’t going to be enough.
“One has to start consuming more,” he said, “especially in Germany.”
Norman’s speech, “The Economic Consequences of Mrs. Merkel,” promised to explain Europe’s “real” problems.
“The budget problems are symptoms, not reasons,” he said, adding that the continent isn’t suffering from a euro currency crisis or a debt crisis. The euro itself was making it difficult to climb out of crisis.
“The eurozone does not have a problem. It is the problem,” the professor told financial news service E24.
Norman added that demand has languished since around 2008, when European states started to compensate for weak consumerism with public-sector spending.
Southern Europe’s main flaw, he added, was that it “lacked a central bank”. The European Central Bank was being run by politicians in France and Germany, where Merkel and her advisors “are satisfied if a decision takes three weeks”.