Former IMF Chief Economist says Catalonia would be “one of the richest countries in the world” if it were independent
Kenneth Rogoff, currently professor at Harvard, predicts that Spain has a “high chance” of being rescued by the European Union. He also ads that, if it were not rescued, even France could fall.
Barcelona (ACN). “Catalonia, as an independent nation, would be one of the richest countries in the world”, stated the former IMF Chief Economist, Kenneth Rogoff, in an interview to Capital magazine, in which he reviews the Spain’s economic situation. Rogoff, currently professor at Harvard University, defends that Spain “has many strong points” such as “excellent companies and regions like Catalonia”, but he thinks that “there is a high probability that Spain may have to be rescued”. This would be the case, as “Greece, Ireland and Portugal would have to reorganise their debt. And when this happens, markets would go crazy” and the rescue would be almost unavoidable, explained Rogoff. If Europe did not rescue Spain in that case, the entire Eurozone would be at risk and even France could fall.
Rogoff said it is “unimaginable that Europe would leave Spain to go bankrupt without lending any help”. But, “if it was to suspend payments, things would not end this way. It would spread to Belgium, Italy... and France”. The prestigious economist warns today the Spanish debt is already at “a dangerous level to deal with but if it increases another 30%, then it would not be able to be governed in any way”. Rogoff warns Europe that it should set a “red line” in the case of Spain. The former economist says that the Spanish Government has not reacted fast enough, but admits that recent reforms have strengthened the country.