Stiglitz: Serbia won't avoid crisis

Nobel Prize winning American economist Joseph Stiglitz says that the world financial crisis would not circumvent Serbia. Stiglitz's visit to Serbia was organized by the Delta Generali Insurance company to celebrate ten years since establishment. Stiglitz: Serbia won't avoid crisis Stiglitz said that the whole region would be hit by the financial crisis, because it depends on Europe, which will suffer even greater consequences than the U.S. Speaking in a conference in Belgrade last night, he said that a recovery of the global market will not begin before the end of 2009. Stiglitz added that generally, countries that entered stand-by arrangements with the International Monetary Fund (IMF) have not benefitted greatly from it. “Some countries will be hit directly on the trade level, others because of the fall in the price of crude materials, and many trough the global financial market. Countries with high debt will be hit harder because they have to get money with higher interest rates, as will countries will greater deficits,” Stiglitz said. “This crisis began at the center, in the U.S., but the periphery will be hit the most, because exports and direct foreign investments will suffer,” he said. He said that the cause of the crisis is that in the U.S., those who took high risk in the short-term were encouraged, and that loans were taken out with an unsatisfactory level of transparency. “Insurance, the American style, is based on the presumtion that an idiot is born every minute. They find those idiots. Globalization means that the world is full of idiots that need to be found. They found plenty in Europe. About half of the bad mortgages were sold in Europe,” he said. Stiglitz heads an expert body for monitoring the global financial crisis, which was formed by the UN General Assembly. He won the Nobel award in 2001, is one of the most quoted economists in the world, has written several books about the negative economic and political aspects of the current shape of the globalization process, and has proposed basic reform measures. Stiglitz speaks in Belgrade on Tuesday evening (Tanjug)

Stiglitz: Serbia won't avoid crisis

Stiglitz said that the whole region would be hit by the financial crisis, because it depends on Europe, which will suffer even greater consequences than the U.S.

Speaking in a conference in Belgrade last night, he said that a recovery of the global market will not begin before the end of 2009.

Stiglitz added that generally, countries that entered stand-by arrangements with the International Monetary Fund (IMF) have not benefitted greatly from it.

“Some countries will be hit directly on the trade level, others because of the fall in the price of crude materials, and many trough the global financial market. Countries with high debt will be hit harder because they have to get money with higher interest rates, as will countries will greater deficits,” Stiglitz said.

“This crisis began at the center, in the U.S., but the periphery will be hit the most, because exports and direct foreign investments will suffer,” he said.

He said that the cause of the crisis is that in the U.S., those who took high risk in the short-term were encouraged, and that loans were taken out with an unsatisfactory level of transparency.

“Insurance, the American style, is based on the presumtion that an idiot is born every minute. They find those idiots. Globalization means that the world is full of idiots that need to be found. They found plenty in Europe. About half of the bad mortgages were sold in Europe,” he said.

Stiglitz heads an expert body for monitoring the global financial crisis, which was formed by the UN General Assembly.

He won the Nobel award in 2001, is one of the most quoted economists in the world, has written several books about the negative economic and political aspects of the current shape of the globalization process, and has proposed basic reform measures.