The bailout plan proposed by Europe for Greece “is not going to work,” said economist Nouriel Roubini.
The plan will fail since “Greece is nearly insolvent,” he says. “A restructuring of its debt is going to be necessary,” said Roubini, RGEmonitor.com chairman and NYU professor.
If the economy of Greece falls apart, it could really damage other countries such as Ireland, Italy, Portugal and Spain, he told CNBC.
“Suppose you have a disorderly collapse of Greece, two things will happen. Financial institutions holding Greek debt — mostly European — will have massive losses. Secondly, a contagion from Greece to Portugal to Spain to Italy to Ireland will have a domino effect," he says.
"Eventually, debt increases and risk aversion is going to drive down the asset prices globally,” Roubini said.
The United States will probably not be affected by a collapse from Greece, but is facing a tough year ahead.
Growth will drop once federal bailout programs end and the Census project is over, he said.
“I see a slumping down to 2 percent (growth) or below,” Roubini said.
Other experts do not believe a bailout for Greece will make much of a difference, Bloomberg reports.
The aid package for Greece “doesn’t ease my fears,” said Rossa White, chief economist at Davy Stockbrokers in Dublin. “I’d certainly like to see a much clearer plan how they’re going to tackle their finances. I’d like to see concrete measures.”
Greece’s problems could affect the euro, resulting in the currency being “less of a liquid currency,” Roubini said.
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