Europe’s debt crisis will send its economies into stagflation, says private equity magnate Wilbur Ross.

Greece’s budget deficit totaled 13.6 percent of GDP last year, Portugal’s 9.4 percent and Spain’s 11.2 percent.

Those kinds of numbers can curb economic growth as well as spark inflation, Ross told CNBC.

"I think what will actually happen to Greece and a lot of the other countries is, at best, stagflation," he said.

Experts say stagflation occurs when a country's inflation rate is high and unemployment rate is high.

If European nations make necessary budget cuts, their economies could be in trouble, because government spending accounts for more than half of their GDP, Ross says.

"If you start cutting back on that, the economy is going to get weak, and that compounds the tax problem. It's kind of a vicious cycle," he said.

The debt itself is inflationary. And with their nearly $1 trillion rescue package, euro zone nations and the International Monetary Fund are simply adding another layer of debt.

"You can't cure debt with more debt," Ross said.

"All that does is buy a little more time. So the real question is will they reform the things that need to be reformed in Greece?"

The United States risks deflation too, says Pimco CEO Mohamed El-Erian.

“There is always a temptation for governments to try to inflate their way out of a deficit. So even if inflation stays low, inflationary expectations will go up,” he told Barron’s.

“The biggest risk is stagflation, and most portfolios have very little protection.”