(L-R) U.S. Rep. Jeb Hensarling (R-TX), U.S. Sen. Patty Murray (D-WA), U.S. Sen. Jon Kyl (R-AZ), U.S. Sen. Max Baucus (D-MT), U.S. Sen. Rob Portman (R-OH), U.S. Sen. John Kerry (D-MA) and U.S. Sen. Pat Toomey (R-PA) participate in a Joint Deficit Reduction Committee hearing October 26, 2011 in Washington, DC.
Jeremy Hobson: There is a new Prime Minister in Greece this morning: Lucas Papademos. He is a former European Central Bank official. And in Italy, an economist named Mario Monti looks likely to head the next government there.
For more, let's bring in Adolfo Laurenti, deputy chief economist with Mesirow Financial. He's with us live from Washington. Good morning.
Adolfo Laurenti: Good morning.
Hobson: So Adolfo, looks like economists are going to be running the show -- is this the answer to Europe's problems?
Laurenti: Well, this really underscores that Europe is facing political challenges even more than economic challenges. They clearly need to improve their fiscal situation, but they also need to do structural reforms to their economies and the labor market. And that's where politicians have crucially failed.
It's important to stop kicking the can down the road at this point, because the longer they wait, the worse the situation will get.
Hobson: Well, you're in Washington -- we're facing this deadline for the Congressional super committee to make cuts. A lot of people say we should kick the can down the road and not make the cuts right now. What do you make of that?
Laurenti: I think that would be really appropriate. We have a real advantage compared with Europe -- we are not in a sovereign debt crisis yet, but that is the trajectory we are following.
So I would recommend for the committee to find an agreement and really move before the pain will be too much to bear. We already have enough pain in this economy at this time.
Hobson: Adolfo Laurenti, with Mesirow Financial, thanks so much.
Laurenti: My pleasure, thank you.