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Russia’s former finance minister Alexei Kudrin expects sharp worsening of situation in euro area by the end of this year

January 23, 2013, 18:34 UTC+3

"The euro area will be under threat,” he said

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DAVOS, January 23 (Itar-Tass) — Russia’s former finance minister, Alexei Kudrin, is expecting a sharp worsening of the situation in the euro area by the end of this year or the middle of next year.

“I am expecting a sharp worsening of the situation after a while. The euro area will be under threat,” he told Itar-Tass on the sidelines of the World Economic Forum. Kudrin recalled that last year he warned the “bubble” in the common currency area would burst in the middle of 2013. After that, he said “unprecedented measures were taken with the aim to postpone that event and the European Bank has been buying up government treasuries, in fact, carrying out emission.”

“The date may be shifted somewhat, by six months, a year at the most, but the bubble of problems will burst, because the problems fail to be addressed properly,” Kudrin said. “The EU underestimates the price of keeping a number of countries within the euro area, as well as the problem of the leading countries’ exodus.”

“The EU keeps deceiving itself, it is looking for solutions, but they are being delayed, and this causes problems to snowball,” Kudrin said, adding that he found the British prime minister’s proposal for a referendum on Britain’s future EU membership as very alarming.

Also, Kudrin pointed to the fact that “there have developed new risks of higher inflation, the sovereign debt shows no sign of reduction, but on the contrary keeps growing, and the debt of the corporate sector has achieved a point where no further growth would be possible.”



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