Roubini CNBC and Bloomberg Reports on Greece Crisis, European Union
Bloomberg — Roubini Interview on Greece Crisis, European Union (Click for Video [6:05] and Report)
Bloomberg — Nouriel Roubini talks with Bloomberg special correspondent Willow Bay about the possibility that members may leave the European Union as a result of Greece’s fiscal crisis. Roubini says a smaller euro region would be “very messy.” Roubini also discusses the possibility of fiscal crises in Spain and Portugal, and the outlook for the U.S. economy.
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From cnbc.com — Greece ‘Nearly Insolvent,’ Bailout Won’t Work: Roubini
By Michele Lodge
Europe’s current bailout plan for Greece “is not going to work” because “Greece is nearly insolvent,” well-known economist Nouriel Roubini told CNBC Wednesday.
“A restructuring of its debt is going to be necessary,” said Roubini, roubini.com chairman and NYU professor.
A collapse of the Greek economy could have domino effect among other weak eurozone countries—including Portugal, Spain, Italy and Ireland, he said.
“Suppose you have a disorderly collapse of Greece, two things will happen,” he added. “Financial institutions holding Greek debt—mostly European—will have massive losses. Secondly, a contagion from Greece to Portugal to Spain to Italy to Ireland will have a domino effect.”
“Eventually, debt increases and risk aversion is going to drive down the asset prices globally, as it happened yesterday and today.”
Roubini said that effects of such a Greek scenario won’t immediately impact the United States, but predicted that a rough road is ahead in the second half of 2010 due to other factors. He said once the stimulus and tax credit are phased out and such programs as the Census hiring gone, “I see a slumping down to 2 percent (growth) or below.
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