Athens Macedonian News Agency: News in English, 13-07-12

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] Nobel laureate economist Christopher Pissarides urges end of austerity in ANA-MPA interview

[01] Nobel laureate economist Christopher Pissarides urges end of austerity in ANA-MPA interview

"The austerity policy isn't working. Austerity has reached extraordinary stages that are unnecessary and I believe that political decisions are to blame. It has been agreed between the International Monetary Fund (IMF) and Germany, namely between (IMF Managing Director Christine) Lagarde and (German Chancellor Angela) Merkel and unfortunately, they are the two most powerful factors in Europe," the Cypriot Nobel prize winner underlined.

Pissarides visited Athens to address an audience at the Centre of Planning and Economic Research (KEPE) on the issue of youth unemployment, in the context of the institute's Outstanding Lectures series.

"When we give 500 billion euros to save the banks, 8.0 billion euros are not enough for the millions of young people who are unemployed," he said.

Referring to Greece, he noted that "there is a light at the end of the tunnel and, I should say, a new optimism in international markets. Reforms are necessary from the bottom up. The businessman, the employee, everybody, should realize that if reforms are implemented correctly they will help Greece in the long run. We should not confuse the necessary reforms with austerity. They are two different programmes and I believe that it was unnecessary to put both on the table with regard to the economy".

Earlier, in a lecture at KEPE titled "Youth unemployment: Why is it so high and where do we go from here?" the former central banker underlined that government intervention is necessary to counter youth unemployment, especially in countries plagued by recession.

"When unemployment in Spain and Greece increased by 16 pct, youth unemployment increased by 32 pct but when unemployment increased by 3.5 pct in Denmark, youth unemployment rose by only 7 pct," he noted, underlining that obviously youth unemployment was higher in recession hit countries.

Pissarides was awarded the Nobel Prize in 2010, jointly with Peter Diamond and Dale Mortensen, for his contributions to the theory of search frictions and macroeconomics. He specializes in labour, economic growth and economic policy. He has been elected to the British Academy, Econometric Society, European Economic Association and the Society of Labour Economists.

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