Warren Buffett, one of the richest businessmen in the world, believes that Europe is facing huge problems that will resolve over time. The investor told CNN Money that mistake of the old continent is called “monetary union”, launched before certain fiscal policies were put in place.
Asked how the United States will be affected by the euro crisis, Warren Buffett said, “economic problems have always existed, and of some of them we are not even aware. On 10 September 2011 we did not know what was happening. There’s always risks in this area, but America has managed to overcome them.”
Regarding the difficulties that eurozone countries are facing, Buffett believes that member states can combine their efforts or may be further alienated from each other, the only two possible directions.
“Europe has no way to disappear, as a market, and will continue to be an important player, but about the eurozone is hard to say if it will survive or not,” said the billionaire.
“America and China will be the deciding factors in the world economy of the next century. The two countries will have to overcome some tensions between them, but that’s nothing new. We want everyone to thrive, not just the United States, which began to happen in the last 20-30 years. In the next half century, people will live better,” adds the American investor.
Euro area is technically, in recession for the second time in three years, after an economic contraction of 0.1% in the third quarter, according to data announced Thursday by Eurostat, the statistical office of the European Commission.
Eurozone GDP fell by 0.1% in the third quarter after a decline of 0.2% in the previous quarter. The economy is technically in recession after two consecutive quarters of a falling GDP.
The European Union has managed to avoid recession after in the third quarter saw a small advance of only 0.1%. In the second quarter, the EU had a GDP contraction of 0.2%, similar to the eurozone.
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