Former Bank of England Governor Lord Mervyn King is continuing his vocal criticism of Europe, claiming Greece’s current economic, social, and political crises have been created “almost as a deliberate act of policy.”
The Telegraph reports that Lord King, who was Governor of the Bank of England between 2003 and 2013, made the comments at a launch event for his new book, “The End of Alchemy”, at the London School of Economics.
The Telegraph quotes Lord King as saying:
In the euro area, the countries in the periphery have nothing at all to offset austerity. They are simply being asked to cut total spending without any form of demand to compensate. I think that is a serious problem.
I never imagined that we would ever again in an industrialised country have a depression deeper than the United States experienced in the 1930s and that’s what’s happened in Greece.
It is appalling and it has happened almost as a deliberate act of policy which makes it even worse.
Greece has been in a contracted depression since 2008 but many observers believe bailouts from the IMF and other central bankers have exacerbated the problem by forcing harsh austerity measures on the country that depress growth. Greece’s outspoken former Finance Minister Yanis Varoufakis compared the bailout reforms to being “fiscally waterboarded.”
Lord King appears to echo this sentiment and The Telegraph says he argued that “the only way to plot a route back to economic growth and full employment” is for Greece and other weak eurozone states to readopt their national currencies, effectively leaving the eurozone.
Lord King makes a similar argument in his new book, extracts of which have been published in The Telegraph. He makes the radical suggestion that Germany should leave the European Union to herald its breakup.
King, who oversaw the UK’s bailouts of Royal Bank of Scotland and Lloyds Bank as the 2008 financial crisis struck, also believes “another crisis is certain” and says that central bankers need to have the “courage to undertake bold reforms” to safeguard against it.
