French economist Thomas Piketty believes European leaders need to take a more “realistic” outlook on Greece and be more flexible on debt forgiveness.
In a CNBC interview on Tuesday, the “Capital in the Twenty-First Century” author said that while German Chancellor Angela Merkel has taken a firm stand against debt relief for Greece, her opposition to more lenient bailout terms is hypocritical as the German economy was given more flexibility with debt reductions after World War II. According to Piketty, without concessions that allow Athens to invest in economic growth, Greece could leave the euro zone and start “the beginning of the end” for the common currency.
“We have to get away from this very ideological approach and get to an agreement,” Piketty said, adding that the European leaders have to be “very careful” about worsening its relationship with Greece as they run the risk of “pushing [it] toward Russia” and seriously disrupting the euro.
“There is a big risk that this will end up very badly” if Greece and Europe fail to reach a deal, Piketty said.