Nouriel Roubini’s Euro-Zone ‘Endgame’ Scenario!
- Nouriel Roubini’s Euro-Zone ‘Endgame’ Scenario!
By Gabriella Stern, http://online.wsj.com/home-page
One prominent economist has Greece exiting the euro by 2013, the ECB making ’half-baked attempts’ to help, and Italy and Spain ultimately being put into a ’Troika program.’
–
Nouriel Roubini, the NYU professor nicknamed Dr. Doom for accurately forecasting the 2008 financial crisis, has just made this Euro pronouncement on Twitter — and on a day like this, it has the air of plausibility.
–
It does seem likely that the ECB will try some fresh measures to lower borrowing costs for Spain and Italy. Although ECB President Mario Draghi will probably wait until the situation grows more dire, as he did last December before unleashing the LTROs.
–
If he acts, and that fails, eventually some sort of steps by the IMF in conjunction with the ECB and the European Union would become necessary to keep Spain and Italy solvent. The question is, can the euro-zone’s leaders kick the can for a couple more years? An overnight Greek euro exit would of course create short-term market havoc but it’s Spain and Italy that are jeopardizing market stability at this point.
end