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Europeans 'getting their hands dirty' solving debt problem

Italian Prime minister Mario Monti today pushes for austerity measures in his country.

Jeremy Hobson: There's a lot going on in Europe this morning both on the macro and micro level. And that's where we'll start
with Julia Coronado. She is chief economist with the investment bank BNP Paribas and she's with us live from New York as she is every Monday. Good morning.

Julia Coronado: Good morning.

Hobson: Well Julia, let's start with the micro. The new Italian leader just proposed big spending cuts and tax increases that he wants to rush through parliament there. Vice President Biden is in Greece today offering U.S. support as the Greeks try to sort out their finances. How important are these little individual events country by country?

Coronado: Well, what we've learned is that all of these countries are in the same boat, so it's very important that each of these countries gain some credibility in their fiscal plans so that they don't cause problems for the countries around them. So it's both important to their own future as well as the future of other European countries.

Hobson: And very little room for error for each one of them.

Coronado: Absolutely, as we've seen, the market has been merciless in demanding a real, viable and credible plan from these countries.

Hobson: And what about the big picture? We've got the leaders of France and Germany in Paris today, meeting, trying to come up with a big long term plan for the euro ahead of a summit later this week. Is this another vital summit for the future of the euro... or just another vital summit for the future of the euro?

Coronado: I know we all have a bit of the "vital European summit fatigue," but you know it is -- from the outside, from this side of the Atlantic, sometimes it's a bit mystifying why we have to jump through all these hoops. But it's a complicated situation it's not easy to solve. The reason we're having so many summits is they're taking the bull by the horns and really trying to push this forward. And while that means more European news than we would probably like, it's a good indication that they're taking this very seriously and getting their hands dirty solving these problems.

Hobson: Julia Coronado, chief economist with the investment bank BNP Paribas, thanks as always.

Coronado: It's a pleasure.

About the author

Julia Coronado is chief economist at BNP Paribas.
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