Monday Jun 11, 201206:07 PM GMT
Analyst says EU caught up in vicious loan circle
Mon Jun 11, 2012 6:7PM
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A political analyst has criticized the European Union for forcing austerity measures against its member states, Press TV reports.

"The whole procedure by which Europe is forcing austerity is actually incorrect, it won’t work," Joachim Martillo told Press TV.

"If you basically give a loan to a country and then enforce austerity, it won’t be able to invest in the business that could make the money that could pay the taxes that could pay back the loan. Then you basically have a vicious circle," he added.

On Sunday, Spain announced that it would be asking the European Union for financial assistance to save its banks.

The 125-billion-dollar loan is meant to end the economic crisis in Spain and prevent devaluation of the euro.

There are worries that more delays in resolving the eurozone debt crisis, which began in Greece in late 2009 and infected Italy, Spain and France last year, could push not only Europe but also much of the rest of the developed world back into recession.

Martillo also suggested that the EU adopts unified policies to resolve the eurozone crisis.

"They actually have to rethink the whole system and try to get some sort of unified policies and maybe not allow the central bankers that were making these policies to disasters to have major input," he said.

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