Eurozone Fundamental Problems Remain Unresolved

"Beneath the surface calm of lower spreads and lower tail risks, the eurozone's fundamental problems remain unresolved. For starters, potential growth is still too low in most of the periphery, given ageing populations and low productivity growth, while actual growth – even once the periphery exits the recession, in 2014 – will remain below 1% for the next few years, implying that unemployment rates will remain very high.
Meanwhile, levels of private and public debt, domestic and foreign, are still too high, and continue to rise as a share of GDP, owing to slow or negative output growth. This means that the issue of medium-term sustainability remains unresolved.

At the same time, the loss of competitiveness has been only partly reversed, with most of the improvement in external balances being cyclical rather than structural. The severe recession in the periphery has caused imports there to collapse, but lower unit labour costs have boosted exports insufficiently. The euro is still too strong, severely limiting the improvement in competitiveness that is needed to boost net exports in the face of weak domestic demand." - in The Guardian

Related ETFs: iShares Germany ETF (EWG), iShares MSCI Italy Index ETF (EWI), iShares MSCI Spain Index ETF (EWP)

Nouriel Roubini : How is the Eurozone Economy doing? In one word: Good! In two words? Not Good!

Nouriel Roubini : How's the Eurozone economy doing? In one word: "Good!" In two words? "Not Good!" - in twitter

Roubini : In The Eurozone the problem is also the amounts of debt in the private sector and the banks

Nouriel Roubini :"...Well, my fear has been that unfortunately in the case of the eurozone and a number of insolvent or nearly insolvent countries in it, their problems may just not be of liquidity but also the amounts of debt in the private sector and the banks.
The robust backstopping of the financial systems by the governments has made them near-insolvent . So, provision of liquidity might not be sufficient. At some point down, there might be coercive restructuring of public debt of countries like Greece and Ireland.
And unfortunately, problems are now spreading to Portugal, possibly Spain and other parts of the eurozone. There is also problem of competitiveness. And now, restoring of not only large stocks of public debt but also private liabilities owned by organizations. ..."
via www.economictimes.indiatimes.com

In the Eurozone The robust backstopping of the financial systems by the governments has made them near-insolvent

Nouriel Roubini :"...Well, my fear has been that unfortunately in the case of the eurozone and a number of insolvent or nearly insolvent countries in it, their problems may just not be of liquidity but also the amounts of debt in the private sector and the banks.

The robust backstopping of the financial systems by the governments has made them near-insolvent . So, provision of liquidity might not be sufficient. At some point down, there might be coercive restructuring of public debt of countries like Greece and Ireland.

And unfortunately, problems are now spreading to Portugal, possibly Spain and other parts of the eurozone. There is also problem of competitiveness. And now, restoring of not only large stocks of public debt but also private liabilities owned by organisations. ..." in http://economictimes.indiatimes.com

Roubini Sees double dip recession risk in Eurozone

May 21, 2010 — US economist Nouriel Roubini sees risk of double dip recession in some parts of the globe.^M

Roubini : The Eurozone is on the verge of breaking up

NYU's Roubini Says Greece Wasn't Ready to Join EU

April 28 (Bloomberg) -- Nouriel Roubini, a professor at New York University, talks with Bloomberg special correspondent Willow Bay about the impact of the Greek fiscal crisis on the European Union. Roubini also discusses the outlook for the U.S. economy. They speak at the 2010 Milken Institute Global Conference. Bloomberg's Pimm Fox also speaks. (This is an excerpt of the full interview. Source: Bloomberg)