"Incomes are too high compared to the current performance of the greek economy."Such harsh adjustments cannot be circumvented even if greece leaves the euro. "The structural reforms are painful for the greek people. But they have to come anyway, so that the economy can grow in the future."The tubing professor was appointed to the five-member council of economic advisors, which advises the federal government, only in february.
In an interview with "welt am sonntag," buch also warned that the spanish banks now needed to be rescued quickly. "The recapitalization of the spanish banks must go very quickly."She expects that a large part of the mortgage will not be repaid. The balance sheets of many spanish banks are burdened by billions of euros in "bad" real estate loans, because many customers can no longer repay the money they have borrowed.
The economic expert also criticized plans for a common european deposit insurance scheme. "European deposit insurance will not help deal with europe’s debt overhang."Such a solution always carries the risk that banks and savers will take advantage of the system and behave in a very risky manner.
At the same time, buch warned against european banking supervision by the european central bank. The central bank is in a conflict of interests when monetary policy and supervision are under the same roof. "If the banks need money for restructuring in a crisis, it should come from the governments, but not from the central bank."