Eurozone could break up

May 6, 2010

, ROME, May 6 – US economist Nouriel Roubini, best known as one of the voices predicting the 2008 global financial meltdown, warned on Thursday that there is a risk of the eurozone breaking up.

"The break-up, the implosion of the euro(zone) cannot be ruled out at this point. The contagion is a real possibility and not only for countries most at risk," Roubini told Italian daily La Repubblica.

The remarks come after investor fears that the Greek debt crisis might spread to other eurozone economies sent markets tumbling in the past week.

Roubini, an economics professor at New York University\’s business school said that "after Greece, the country facing greatest danger is Portugal. Then Ireland and Spain, and then at a reasonable distance, Italy," Roubini said.

Roubini praised Italy\’s healthy banks and past pension reforms, but warned of the country\’s "very serious problems, from public debt to the lack of competitiveness."

Italy\’s debt is among the highest in the world, at 115.8 percent of GDP in 2009 and the European Commission said Wednesday it would grow to 118.2 percent this year.

The centre-right government has managed to limit the growth of the public deficit, which stood at 5.3 percent of gross domestic product in 2009.

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