Nouriel Roubini is glad to see some sort of Eurozone bailout in the works for Greece, but thinks that rescue operations will have to go much further.
“It is a step in the right direction even if my favoured choice for Greece is to get a formal IMF program,” said Roubini, an economics professor at New York University who is known for his prescient call on the financial crisis.
“IMF lending is based on conditionality of achieving certain fiscal and structural goals. In the case of loan guarantees, it’s very hard to make those loan guarantees conditional…you either give them — or don’t give them.”
Roubini said the problems in Greece are the “tip of the iceberg” and that the high public deficit and loss of external competitiveness for a number of reasons is shared by Spain and Portugal — and to some degree by Ireland and Italy.
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