Nobel laureate economist says euro not in danger of collapsing

14:36, January 20, 2011      

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Economics Nobel Prize winner Christopher Pissarides said on Wednesday that the euro is not in danger of collapsing, but he is concerned about the public deficit of European Union countries.

"The euro will survive because it is being supported by big countries, like Germany and France, Pissarides told a news conference in Nicosia on the occasion of taking up teaching at the state University of Cyprus.

Pissarides, a Greek Cypriot, shared the 2010 Nobel Prize in Economic Sciences with Massachusetts Institute of Technology professor Peter Diamond, for their research into the difficulties of matching supply and demand, particularly in the labor market.

Pissarides said a bigger challenge than the euro and a renewed economic recess for the European Union is the problem of public deficit in member countries.

"The difficulties emanate from the fact that there is not a commonly acceptable definition between member countries on fiscal deficit," he added.

Pissarides sounded optimist that Greece will be able to overcome its public deficit and sovereign debt crisis, which had sparked a wider crisis for the common currency.

He said the Greek government is showing a strong will to overcome the economic crisis and there is also an understanding by the man in the street that the crisis has to be tackled.

"This is a unique opportunity for the government to bring about economic reforms, which are very difficult for the country but which have to be effected,"Pissarides said.

He also said the Greek government is on the right track and the country will not be faced with a new crisis, unless something out of the ordinary happens.

Source: Xinhua
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