The eurozone economy is in such disarray that it would be lucky to settle into a long-term period of general stagnation similar to Japan's fate over recent decades, says New York University economist Nouriel Roubini.

Meanwhile a European Union summit underway will likely fail to produce concrete steps and policies needed to quickly contain and extinguish the debt crisis spreading across Europe.

The eurozone's problems differ from those of Japan due to the nature of the continent's debt burdens.

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.

"It's not just a slowdown in the periphery of the eurozone — Greece, Ireland, Portugal, Italy and Spain — it's a recession and it's going to become a depression. Output has fallen from the peak by 15 percent in Greece. It's the same thing in the case of Spain. The unemployment rate in both countries is in the mid-20s and closer to 40 percent for young people," Roubini tells Bloomberg Television.

"This could become like Japan but worse. Japan did not have a sovereign debt crisis because it was a net creditor country, but all of these countries are net debtors, so they would be lucky to end up in a multi-decade stagnation like Japan," Roubini adds.

"It's getting worse. There is already a sovereign debt crisis, a banking crisis, there's a balance of payments crisis, there's an economic crisis, and all of those things together are getting worse."

European Union leaders are set to open a summit to find ways to tackle the crisis, but such high-profile events in the past rarely produced results with any teeth, with statements involving pledges to adhere to greater fiscal integration.

"The European leaders already had 18 summits over the last two years. The last summit, the newspaper headlines read 'European Leaders Decide to Postpone Key Decisions,'" Roubini says.

Now that the crisis has gone on for over two years with little progress made to contain it, the workload needed to stop it has grown, while the deadline to finish gets closer.

"Now there are 19 summits and they are supposed to come up with a political union, with a banking union, with debt mutualization, with a fiscal union, with a transfer union, with a growth compact that will resolve the problems that haven't been resolved for years. So chances are the Germans are going to say no to European-wide deposit insurance and no to e-bonds," Roubini adds, referring to euro bonds, a proposal to ease the debt crisis.

Germany, the European economic engine, has balked at calls from other eurozone countries to issue a single bond backed by all eurozone nations, which would help ease the credit conditions in debt-laden periphery nations.

Germany claims such a move would unfairly ask it to shoulder Greek and other debt, would raise its

interest rates at home and possibly open the door to encourage more reckless spending in countries like Greece.

Other proposals include creating a single entity that would backstop banking deposits, though Germany opposes asking its taxpayers to insure Italian, Spanish and other loans, at least under current terms.

German Chancellor Angela Merkel has remained firm.

"I don't see total debt liability as long as I live," she was quoted as saying, Reuters reports, adding she has also described euro bonds "economically wrong and counterproductive."

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.