Prof. Tsiddon: Financial crisis to end in 2014
Head of capital markets at Bank Leumi tells Calcalist central economic conference, 'We are on the cusp of a turning point in which politicians are going to have to make some decisions, otherwise the damage to their economies will be massive and irreparable'
"According to the economics text books, the recovery from the 2007 crisis was supposed to take seven years, which is encouraging because it means that we supposedly are half way there. In my opinion, if the governments continue infusing the global financial system with uncertainty – it'll take 10 years," Tsiddon said Wednesday.
"My feeling is that we are on the cusp of a turning point in which politicians are going to have to make some decisions, otherwise the damage to their economies will be massive and irreparable.
"If we do feel somewhat optimistic it is because we are at that turning point and I have a feeling that the politicians will make the right decisions. I believe that the crisis is more likely to end by 2014 rather than in 2020."
Tsiddon addressed the issue at the Calcalist central economic conference as part of a panel on the capital market and finances, which included Israel's former Accountant-General Shuki Oren and head of finances at Mizrahi Tefahot Bank, Eldad Fresher.
Tsiddon added, "I think that the question as to whether the global economy will experience a double-dip recession is inconsequential. It's clear to us all that since the beginning of the year, the rate at which the US and Europe are recovering has dropped to zero.
"The question as to whether the current low growth rate will drop even further depends on the political systems in the US and Europe, which currently are performing at a level that's lower than mediocre.
"I'm no political pundit but I think that Europe – which is the epicenter of the global crunch and not the US – will adequately handle its problem. There are at least several people in Europe who've read history books and understand the dire consequences of dissolving the euro zone. This would be detrimental to Germany, not only to the euro zone's weaker members."
Click here to read this report in Hebrew
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