Stiglitz: Europe have to deal with older bank debt

Leading economist, Professor Joseph Stiglitz, has warned that Europe must deal with the issue of 'legacy debt'.

Stiglitz: Europe have to deal with older bank debt

Leading economist, Professor Joseph Stiglitz, has warned that Europe must deal with the issue of 'legacy debt'.

Professor Stiglitz has said that the Eurozone will not be able to recover if the issue is not dealt with.

His comments come following murmurings in Europe that EU money should not be used to pay for so called "legacy assets", including older bank debt.

Prof. Stiglitz said he hopes European leaders realise that the issue cannot be ignored.

He said: "I hope that eventually they realise they have to deal with the legacy problems. I found it quite astounding that they said they weren't going to deal with the legacy problems with the funds they have available.

"If they don’t deal with it, Europe is not going to be able to go forward together. The countries that have inherited high-legacy debt are going to have higher interest rates, it is going to slow their growth, it is going to put them at a continuing disadvantage."

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