Tags: Roubini | Europe | Train | Wreck

Roubini: Europe Is a ‘Slow-Motion Train Wreck’

Wednesday, 09 May 2012 08:49 AM

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The European economy resembles a “slow motion train wreck” that will end with Greece leaving the eurozone, says New York University economist Nouriel Roubini.

In recent elections, Greece's leading political parties failed to muster enough votes to form a coalition government that would favor staying the course with austerity measures in exchange for bailout money.

Calls to scrap austerity are growing, even if such policies mean shut off the flow of bailout money, which is roiling currency and stock markets worldwide.

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

"Europe will be lucky if it ends up in stagnation like Japan for the next 10 years," Roubini tells CNBC.

Still, investors shouldn't stock up on cash and hide, at least here in the U.S.

Roubini says he's 70 percent invested in global stocks, half of that in U.S. indices, and 30 percent in cash, CNBC adds.

The European Commission, the European Central Bank and the International Monetary Fund are set to disburse a tranche of bailout money to Greece in June, although fears are growing the country won't have a coalition government set by then.

Greece's left-wing Syriza party is working to form a government, and the party's leader Alexis Tsipras has said he opposes sticking with austerity measures, which include layoffs and pension reforms.

Some high-ranking Greek officials point out the country is growing closer to leaving the currency zone.

"If we say no to everything, we leave the eurozone," Gikas Hardouvelis, economic advisor to outgoing Prime Minister Lucas Papademos, told Greece's Skai Radio, according to the AFP newswire.

"We have seen the reactions of European leaders... The only thing they are saying is that Greece is heading towards the exit of the euro," Hardouvelis adds.

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown


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