In an interview with Der Spiegel, Nouriel Roubini seems little moved by Europe’s latest bailout effort.
He even sees risk of a double dip recession for the continent.
SPIEGEL: According to the International Monetary Fund, economic activity is picking up again with forecasts of 4 per cent growth this year. Isn’t this cause for Dr. Doom to surrender to Dr. Boom?
Roubini: I’m a realist. I can only see a few bright spots in some countries like China, India or Brazil. But the rest? The US economic recovery has been anemic, Japan looks comatose, and Europe is facing a double dip. The Continent is vulnerable to falling back into recession. Even before the Greek shock, the outlook was rather moderate, but now euro zone growth is closer to zero.
SPIEGEL: Was monetary union a mistake?
Roubini: I wouldn’t go that far. But it might have been a mistake to allow so many countries in so early. A smaller core of countries that are economically more homogeneous, fiscally more sound and committed to structural reforms would have made for a more successful monetary union. The trouble is, once they are in there is no exit without causing a lot of damage.