Expenditure incurred by a government-run welfare system does not contribute to negative growth, said Klaus Regling, chief executive officer, European Financial Stability Facility (EFSF) on Tuesday.
Regling was speaking on ‘The Euro and the Future of Europe’ at the International Institute for Strategic Studies—The Oberoi Lecture. IISS is a UK-based think-tank on global security, political risk and military conflict.
“Certain parts of Europe, such as northern Europe, have well-developed welfare systems as long as they are soundly financed [through taxes]. Problems arise when people want well-developed social systems but do not want to pay for them,” said Regling, as he answered questions pertaining to the economic crisis. The lecture was attended by dignitaries like D Subbarao, governor, Reserve Bank of India, and Deepak Parekh, chairman, HDFC Group and member of parliament Piyush Goyal.
Regling said that in the coming years countries such as India, China and Brazil would increase their share in the global economy, thus reducing Europe’s share. “It will be a continuous process,” he said.
Sanjay Baru, director for geo-economics and strategy, IISS, said: “We will be hosting at least five to six such lectures every year.”