Volatility on both sides of the Atlantic has upset the world's markets for weeks. He said that despite such progressive steps as theGerman parliament passing an expansion of the European bailout fund, the European Financial Stability Facility (EFSF), more must be done in Europe, and quickly.
"What we need to see over the next few days is stabilization of the sovereign debt and bank situation," he said, as well as an agreement to pay 8 billion euros in the next financing tranche to Greece so it can avoid default. There must also be "some movement toward clarity" as to where Europe wants to be in five years.
He blamed the unstable U.S. economic situation on federal policymakers responsible for housing, credit, public finance and infrastructure issues who have done nothing, leaving the Federal Reserve to act.
These agencies "have been asleep at the wheel" and must "wake up and get their act together. You can’t have the Fed do everything. The Fed is not in a position to deliver outcomes."
In the meantime, U.S. multinationals sit on the sidelines, he said. In the U.S., unlike Europe, "you have a set of healthy balance sheets. The multinationals are very healthy. The problem is these healthy balance sheets are not engaging. They are waiting. As long as they wait... markets remain under pressure and, unfortunately, unemployment is going to stay unacceptably high."
He added, "I don’t blame them for waiting...I blame the policymakers for not realizing how severe the situation is here and especially how severe it is in Europe. They've been too slow to respond to these historic changes."
