DAVOS, Switzerland (AP) – A top U.S. economist is warning that the eurozone debt crisis could erupt again this year if European leaders do not move faster to solve their problems.
Barry Eichengreen says recently calm eurozone financial markets “have swung from undue pessimism to undue optimism.”
He warns that the crisis in the 17-country currency group “is going to heat up again in 2013.” He spoke at the World Economic Forum in the Swiss Alpine resort of Davos.
Eichengreen, a professor at the University of California, Berkeley, says markets need to see quicker action to set up a banking supervisor at EU level, along with a centralized way to restructure failed banks.
That would keep bad banks from bankrupting governments through bailouts. Leaders are still debating how to implement it.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)