Europe's economic problems could spread to the United States and cause stocks to fall, says economist Nouriel Roubini.
"What is happening in the euro zone right now is going to have a negative effect on U.S. economic growth," Roubini told CNBC.
"There's contagion coming from Europe to the U.S., that's a first thing ... too many governments decided to do fiscal austerity too soon."
"I'm a little bit worried about stocks," Roubini says, especially since half of the profits of S&P 500 companies come from abroad.
"Slowdown at home, slowdown abroad, in my view there is a risk of a further correction."
Roubini believes Europe will experience a double-dip recession, Japan’s economy “is falling off the cliff,” and there’s evidence of a slowdown in economic growth in China as well.
However, while fiscal austerity measures are necessary in Greece, Spain, and Portugal, Roubini says. But Germany, Japan, and China, should be providing their economies with fiscal stimulus.
Howard Archer, chief European economist at IHS Global Insight said the weaker euro was probably giving some support to business confidence, although consumer confidence remained abnormally low.
"It is mildly encouraging that euro zone economic sentiment has not taken a further serious hit from the region's sovereign debt problems and tightening fiscal policy in June," Archer told Reuters.
"Nevertheless, sentiment appears fragile and significant downside risks remain to already pretty muted euro zone economic recovery."
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