Nouriel Roubini

“Spain is as much of a disaster as Italy” Says Nouriel Roubini

While the markets are focused on Italy and Greece as the main problems of the euro zone, there is another country just as bad, Spain.

Here’s what Roubini said in a recent interview in Moscow after being asked if Italy will be the last stop or will the debt crisis spread to bigger countries, “Well right now, the worries in the market are about Italy, but Spain is as much of a disaster as Italy. There debt as a share of GDP is lower, but their deficit is higher. Unemployment 20% including young people 40%.” He goes on to say that you can’t rule out contagion spreading to France because of French bank exposure to Italy and Spain. There may even be a downgrading of France’s credit rating from AAA to AA.

Roubini doesn’t think there will be bank failures, but their could possibly be temporary government takeovers of banks in trouble.

When asked about how many countries will exit the euro zone, Roubini believes that Greece and Portugal will be kicked out. He doesn’t think Italy or Spain will be kicked out in the next 12 to 18 months, but could happen in the next 3 years if they don’t get their debt under control.

You can watch the full interview here.

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