Alexei Kudrin: Debt Crisis May Result in Economic Stagnation in Europe

Alexei Kudrin: Debt Crisis May Result in Economic Stagnation in Europe
14 September 2012

European countries are to seek more drastic remedies to combat the debt crisis. In particular, to opt for national debt restructuring and their transfer to the market zone. Otherwise, the debt load would hamper economic growth in the euro-zone and result in economic stagnation, stated the Minister of Finance of the Russian Federation (2000-2011) Alexei Kudrin in the course of  “The Future and the World Economy” discussion at 9th Yalta Annual Meeting.

“Due to the debt crisis, the next year will not be the best for the economy. If the crisis becomes sharper than it is now, the growth will be lower,” pointed out Alexei Kudrin, mentioning that he is pessimistic and assesses the situation in the Europe’s economy as a complicated one.

At the same time, the Russian economist emphasizes that the current actions aimed at improvement of the situation in the euro-zone can only put off the problem, but are not a solution. “To resolve the debt problems of the leader countries, the growth must override the debt increase. But this is not expected within the forthcoming 3-4 years. The problem would only worsen,” Alexei Kudrin stated.

In his opinion, the economy needs a different remedy: debt restructuring. “It is necessary to enter the market zone of the debt servicing. If we fail to do so, we’ll come back to a more complicated situation in a year’s time. The attempts to support the demand, to increase liquidity makes the problem solutions artificial, prevents functioning of the market signals.” In Alexei Kudrin’s opinion, unless the economic policy vector is changed, the European economy may see a stagnation of at least five to seven years.

The 9th Yalta Annual Meeting entitled “Ukraine and the World: Addressing Tomorrow’s Challenges Together” takes place in Yalta at the Livadia Palace, Ukraine, from 13-16 September 2012. More than 200 leaders from politics, business and society representing more than 20 countries will discuss major global challenges and their impact on Europe, Ukraine and the world.

The President of Ukraine Viktor Yanukovych and the Prime Minister of Turkey Recep Tayyip Erdogan opened the plenary part of the 9th YES Annual Meeting on September 14. The two leaders discussed critical issues affecting the development of Ukraine and Turkey, as well as the future of a “Wider Europe” in the 21st century. Aleksander Kwasniewski, President of Poland (1995-2005) and Chairman of the Board of YES, moderated the discourse.

The overarching topic of the 9th Yalta Annual Meeting will be the key transformations that are already shaping the future of the world. Forum sessions will focus on the future of the world economy, on a new world order and its security, and on possible models for the development of capitalism. Special attention will be paid to the role of innovation and leadership in transforming the economy and society. Other topics for discussion include the future of the European Union, energy issues and the internal and external challenges facing Ukraine.

This year’s Yalta Annual Meeting will welcome, among others, Robert Zoellick, Dominique Strauss-Kahn, Condoleezza Rice, Gordon Brown, Alexei Kudrin, Alec Ross, Eric Lander, Kairat Kelimbetov, Carl Bildt, Javier Solana.

At the plenary discussions of the 9th YES Annual Meeting, Ukraine will be represented by the Prime Minister Mykola Azarov; the First Vice Prime Minister of Ukraine Valeriy Khoroshkovsky; Deputy Prime Minister and Minister of Social Policy Serhiy Tihipko; Minister of Economic Development and Trade of Ukraine Petro Poroshenko; Minister of Energy of Ukraine Yuriy Boyko; Minister for Foreign Affairs of Ukraine Kostyantyn Gryshchenko; Secretary of the National Defence and Security Council of Ukraine Andriy Klyuev.

Chrystia Freeland, Global Editor-at-Large at Thomson Reuters will moderate discussions.

The 9th Yalta Annual Meeting is streamed live on korrespondent.net in Ukrainian and on euronews.com and yes-ukraine.org in English.

The official Twitter of the 9th Yalta Annual Meeting: @yes_ukraine
Hash tag: #yalta2012

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Quote

Shashi Tharoor
Member of the Lower House, Parliament of India, UN Deputy Secretary General (2001-2007), 9th Yalta Annual Meeting, 2012
«We are moving to a world beyond superpowers<…> India, a country that has always followed the rules now becomes a country that makes the rules»