dr. simon johnson, sr. fellow at peterson institute and professor of entrepreneurship at the sloan school of management. dr. johnson has testified before this committee on several occasions and we welcome him back this morning. we also have dr. fred berkston, director of the the peterson institute. he recently announced after 13 years of ably leading the peterson institute, he steps down as director and focusing more of his time on research and writing and i commend him for his year of leading at the institute and wish him well in his further endeavors ppd he's testified many times before the budget committee as well. we also have with us this morning, dr. adam larrick, visiting scholar and someone deeply knowledgeable on european affairs having spent the last two years there. we look forward very much to your testimony and welcome you to the senate budget committee this morning as well. i'd like to begin by briefly reviewing the situation as i see it in europe. to be clear, what is happening in europe to be

dr. simon johnson, sr. fellow at peterson institute and professor of entrepreneurship at the sloan school of management. dr. johnson has testified before this committee on several occasions and we welcome him back this morning. we also have dr. fred bergsten, director for the peterson institute for international economics. i would note that after 13 years of ably leading the peterson institute, he'll be stepping

we'll start with simon johnson. dr. johnson, thank you, again, very much for being here. please proceed. we'll go right through the witnesses. and then we'll open it up to questions. and we'll do seven-minute rounds. and again, thanks to all the witnesses for being here. dr. johnson, please proceed. >> thank you, senator conrad and senator johnson, and thank you also for placing the conversation today in the context which you just did of the u.s. budget and our unsustainable situation. i think that is absolutely correct. and i'd like to frame my remarks very much to respond to that. let me make three points. first of all, the eurozone has already failed. the eurozone was established as a bastian of stability of prosperity on the world. it was designed to further cement the european union and to build a larger, more powerful economy, that this has not worked. as you said a moment ago, fiscal mismanagement lies at the heart of their problems and i completely agree. they're trying to solve fiscal problems through, i think you might call it, monetary solutions. i might call i

we will start to with simon johnson. dr. johnson, a thank you for being here. we will go right through the witnesses and we will open it up to questions. we will do seven-minute rounds and thank you to all the witnesses. dr. johnson, please proceed. >> thank you. thank you for placing the conversation in the context of the u.s. budget and are unsustainable situation. that is absolutely correct. i would like to frame my remarks very much to respond to that. let me make three points. first of all, the euro zone has already failed. the euro zone was established as a bastion of stability in the world. it was designed to further cement the european union and to build a larger economy. this has not worked. fiscal mismanagement lies at the heart of their problems. i completely agree they're trying to solve the fiscal problems through monetary innovations. i do not think this is going to end well. for them or for us. with regard your question about the new agreement, the latest round, i think this is a very small step relative to their problems and relative to what the