Europe's Condition Is Terminal: CIO
Associate Editor, CNBC
The debt crisis afflicting the euro zone is a condition that can be delayed but ultimately cannot be resolved, David Murrin, chief investment officer at Emergent Asset Management told CNBC.
"We have no growth, imported inflation, so we have no possibility of growing out of it and a two-speed Europe founded on the wrong principles," Murrin said.
The fact that policymakers cannot agree on even the smaller details shows that Europe can never work, according to Murrin.
"Political unification needs reality, you don't just wish it and it comes about, you have to have economic reality and a positive outcome.
We'll only have a positive outcome if we get more growth by agglomerating the smaller entities into a bigger single one. Those advantages are not working," Murrin added.
European Union leaders will meet on Sunday to draw up plans for a decisive solution to the debt crisis. However, hopes that it will be achieved have been tempered by the announcement that another summit will now need to be held on Wednesday because of apparent differences between the two biggest players, France and Germany, which will detail the plan.
Murrin said the decline of Europe was part of the broader decline of the West's dominance in global economic and political affairs.
"The paradigm of Western economic power is really over and you have a decision to make, do you deny it or do you lie to yourself and the world by borrowing more money that you're never going to pay back and are forced to default or do you act and default in an orderly way?" Murrin said.
He added that conglomeration was not working so the only other option available was to break apart for the euro zone.
"Politicians protect their own political life first and you end up with this whole grey body politic which fails to respond to critical times. We're represented by grey people who do not have the courage to do the things for our future to be improved," Murrin added.
James Shugg, senior economist, at Westpac Bank, told CNBC that Greece should not get the latest tranche of aid.
"The bailouts just add to Greek debt, that's crazy and that is not how to sort this out.
Write off the debts, give the money to the banks who are going to make huge losses when Greek rescheduling takes place.
It's a scorched Earth policy but sorts out the problem," Shugg said.