Euro Marriage in Peril By NOURIEL ROUBINI | NOURIEL ROUBINI BLOG

Wednesday, November 27, 2013

Euro Marriage in Peril By NOURIEL ROUBINI

On the morning of July 26, 2012, I was meeting with the central bank governor of a country at the core, or stable center, of the euro zone. He was telling me that the European Central Bank could do little to rescue peripheral countries like Italy and Spain, whose interest rates were going through the roof.

On that day, to the surprise of my interlocutor and global investors, the E.C.B. president, Mario Draghi, made his famous declaration that the bank was prepared to do “whatever it takes” to preserve the euro. That led to the creation of outright monetary transactions, known as O.M.T., and saved the euro zone.

Today the risks for the euro zone are much lower. Still, 2013 has been a volatile year. The crisis in Cyprus showed that the euro zone remains deeply divided over how to resolve the crisis in the periphery; inconclusive German elections created new uncertainties in the euro zone’s core; and the Italian government teetered on the verge of collapse more than once.

More uncertainties are likely in 2014 if “austerity fatigue” spreads in Greece, Italy, Portugal and Spain and populist parties gain strength in the May 2014 European Parliament elections.
More @ NYTimes

Nouriel Roubini

Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

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.