Latins need to unite against Berlin – Prodi
FORMER European Commission president Romano Prodi said Latin countries should unite against Germany and force through a reflation policy before the euro spins out of control.
"France, Italy, and Spain should together pound their fists on the table, but they are not doing so because they delude themselves that they can go it alone," he told Italian newspaper 'Quotidiano Nazionale'.
Mr Prodi, who is a professor of economics and a former Italian prime minister, said Germany risked breaking up the euro and damaging its own economy. "Their exchange rate will double and they will not sell a single Mercedes in Europe. German industrialists know this but all they manage to secure are slight changes, not enough to end the crisis."
The sharp criticisms come just days after the US Treasury also criticised the eurozone's biggest economy for giving a deflationary bias to the euro area and the world economy.
Mr Prodi lambasted German concerns about inflation. "German public opinion is by now convinced that any economic stimulus for the European economy is an unjustified help for the 'feckless' South, to which I have the honour of belonging.
"They are obsessed with inflation, just like teenagers obsessed with sex. They don't understand that the real problem today in deflation, as I have been saying for a year," he said.
Mr Prodi said Germany was in total control of Europe: "Today there is only one country and only one in command: Germany."
He said Italy wouldn't be able to gain control over its public finances while the recession continued. "The debt to GDP ratio has been rising for three years despite austerity. It is a failed policy."
He said Italy should be allowed to ease austerity to invest in business, and the Maastricht treaty 3pc deficit ceiling should be changed: "It is stupid that this has not been changed for 20 years."