Roubini : No Eurozone break-up in 2012 | NOURIEL ROUBINI BLOG

Wednesday, January 11, 2012

Roubini : No Eurozone break-up in 2012

Economist Nouriel Roubini interviewed by the Indian TV ET Now this 11 January 2012

Nouriel Roubini : The economic and financial conditions of the Eurozone are very severe. Germany and France cannot impose their will on all the other countries because the decision of the Eurozone had been taken by consensus. The trouble with the Eurozone right now is that you have severe stock imbalances, large stocks of public debt, liabilities of their financial system and flow problems. There has been the loss of competitiveness at the periphery of the Eurozone. There are large external imbalances and all the policies that the Europeans are pursuing right now, fiscal austerity are going to make the recession in the Eurozone worse. Not just Greece, but a number of other countries over the next couple of years will have to restructure their public debt and private ones in a coercive way. I also expect that one or more members of the Eurozone will eventually exit the Eurozone. If it is a small Greece exiting, that can be managed. If eventually it were an Italy or Spain having to exit, that would effectively be a break up of the Eurozone. So of all the sources of systemic risk in the global economy, certainly the problems of the Eurozone are the most severe.

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Nouriel Roubini, (born March 29, 1958, Istanbul, Turkey), Turkish-born American economist and educator who was best known for predicting the 2007–08 subprime mortgage crisis in the United States and the subsequent global financial crisis.

Born to Iranian Jewish parents, Roubini moved with his family to Iran and Israel before they settled in Italy in 1962. After a year at Hebrew University of Jerusalem, he studied economics at Bocconi University in Milan (B.A., 1982) and Harvard University (Ph.D., 1988), where he specialized in macroeconomics and international economics. He joined the economics faculty at Yale University in 1988 and taught there until 1995, when he moved to New York University. He also served as a visiting scholar to the International Monetary Fund (IMF), was a research associate with the National Bureau of Economic Research (NBER), held single-year terms on the White House Council of Economic Advisers (1998–99) and at the U.S. Department of the Treasury (1999–2000), and cofounded (2004) the consulting firm Roubini Global Economics. Roubini spent much of his early career studying countries that experienced extreme economic failures, such as Mexico (in 1994), Thailand and other countries associated with the 1997 Asian financial crisis, Russia (1998), and Argentina (2000). He determined that each shared one common element: a massive current account deficit.(www.britannica.com)

Nouriel Roubini is the Chairman and CEO of Roubini Macro Associates, LLC, his own global macroeconomic consultancy firm. He is also a professor of economics at New York University’s Stern School of Business. Dr. Roubini has extensive policy experience as well as broad academic credentials. From 1998 to 2000, he served as the senior economist for international affairs on the White House Council of Economic Advisors and then the senior advisor to the undersecretary for international affairs at the U.S. Treasury Department, helping to resolve the Asian and global financial crises, among other issues. The International Monetary Fund, the World Bank and numerous other prominent public and private institutions have drawn upon his consulting expertise.