European Recession Poised to Worsen on Cuts, Roubini Says

Economies that use the euro probably will shrink further as governments cut spending and banks seek to lend less, said New York University Professor Nouriel Roubini.

“It’s like a slow-motion train wreck,” Roubini, the economist who predicted the 2008 financial crisis, said today at a conference in Santiago, Chile.

Greece won’t be the last euro-zone country to restructure debt and may exit the euro in 2013 or 2014 along with another small country, the co-founder of Roubini Global Economics LLC said. Roubini also said he doesn’t expect a self-sustaining recovery in the U.S. anytime soon.

The so-called BRIC countries of Brazil, Russia, India and China are “over-hyped” and require reforms to sustain growth, he said. China, which may face a “hard landing” in a few years, needs to grow private consumption as a percentage of gross domestic product, Roubini said.

To contact the reporter on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.