Greek-style debt crisis could hit Japan, US: Roubini

19th May 2010, Comments 0 comments

Greece's woes may be the start of a widening sovereign debt crisis that could tear through developed economies, including Japan and the United States, leading economist Nouriel Roubini warned Tuesday.

"What's happening in Greece is just the tip of an iceberg of a broader range of sovereign debt issues, of deficit, in many advanced economies," said Roubini, one of the few experts who predicted the financial crisis.

The new crisis could occur "not just in the eurozone but UK, US, or Japan," he added.

Roubini, speaking at a London School of Economics conference, said there was an "economic recovery, but in many ways countries have not answered the real problem.

"The next stage of the crisis could be a sovereign debt crisis that could lead to a double-dip recession."

He reiterated his view that "there is a possibility of a breakup of the monetary union."

"One or more countries of the eurozone could default," said the New York University professor.

"Some of the weaker members of the monetary union might decide they'll be better off exiting."

Greece has been forced to promise deep public spending cuts in return for a huge bailout from the European Union and International Monetary Fund to keep its debt-stricken economy afloat.

The austerity cuts have met with fierce public opposition and triggered a wave of strikes and protests.

© 2010 AFP

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