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Warren Buffett laments that Europe has no Bernanke or Paulson

November 14, 2011 |  8:27 am

 

 

Billionaire investor Warren Buffett said Europe lacks the type of strong government financial officials with broad powers who helped stabilize the U.S. economy in the fall of 2008, a deficiency that is prolonging the debt crisis caused by Greece and Italy.

Speaking on CNBC on Monday morning, Buffett said it's not clear who in Europe could play the role that Federal Reserve Chairman Ben S. Bernanke, former Treasury Secretary Henry M. Paulson and former President George W. Bush did in 2008 in assuring markets they would do whatever it took to stem that financial crisis.

The void has led to a run on European debt and investments, Buffett said.

"It’s very very tough to stop a run," said Buffett, whose Berkshire Hathaway Inc. sold all of its European sovereign debt more than a year ago and is not ready to jump back in. "It takes a … widespread belief that the people in authority will do whatever it takes to stop it and they have the ability to do whatever it takes."

"We believed Bernanke and Paulson and the president of the United States when they said that in September of 2008," Buffett said. "There's no one in comparable authority in Europe."

While he's encouraged by the new political leadership in Greece and Italy, Buffett said he's still concerned about the Eurozone's financial situation. Berkshire Hathaway owns no stock in any bank within the zone, he said.

But Buffett appeared confident that Europe eventually would overcome the crisis.

"Europe has all kinds of strengths. Europe is not going to go away," Buffett said. "Ten years from now, we will be selling more goods to Europe and buying more goods from Europe and they will have more GDP per capita. But getting from here to there may be a problem."

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-- Jim Puzzanghera in Washington

 

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