The dark clouds looming above Europe may be even more ominous than people realize.
Former U.S. Treasury secretary Tim Geithner fears embattled Europe faces a long slog ahead which could be even worse than Japan’s long period of lost growth.
“They’ve got a terribly tough, long road ahead of them,” Geithner said on Tuesday, while speaking at The Economist’s Buttonwood Gathering in Manhattan.
Since the early 1990s Japan has struggled to escape a depressing spiral of nonexistent economic growth, falling prices and mounting debt. Initially known as the “Lost Decade,” Japan’s nightmare has actually lasted over 20 years.
Geithner went so far as to say that Europe would actually be “lucky” if it suffered Japan’s fate.
That’s because Japan’s per capita income growth and unemployment rate weren’t as dire as what some European countries are facing currently.