The issue of whether or not to raise taxes in the US will be an important one in the presidential election campaign as the American economy is threatened by slowing world growth and recession in parts, famous economist Nouriel Roubini told CNBC on Wednesday.”There is no real decoupling… there is a recession right now in the periphery euro zone,” Roubini said in an interview at the World Economic Forum in Davos.
“There’s a recession throughout Europe, US growth is very anemic. There is a slowdown right now in China,” he added.
Data released by the UK government showed the economy contracting by a worse-than-expected 0.2 per cent in the fourth quarter, bringing the country closer to a double-dip recession.
On Tuesday, the International Monetary Fund (IMF) slashed its estimates for world economic growth and warned that the euro zone debt crisis was going through a “new, perilous phase.”
There are too many problems in the euro zone such as the large public debt and the current accounts of some countries, Roubini pointed out.
“These will not be solved by the ECB printing money,” he said.
“These are fundamental problems that are going to take years to solve… and now the contagion has spread.”