No quick solutions to eurozone problems: economist

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Economist Nouriel Roubini, famous for having correctly predicted the global financial crisis, warned Thursday on the eve of a crucial eurozone summit there were no quick solutions to its debt crisis.

It would take time to fix the dual problems of high debt and slow growth in the 17-nation eurozone so-called periphery: Greece, Ireland, Portugal, Spain and Italy.

"The fundamental problems of these economies are chronic and are not going to be resolved any time soon," Roubini told participants attending the annual MIPIM real estate industry get-together.

Roubini said that he believed one of the major challenges facing the eurozone was that the rate of growth varied widely amongst the member countries.

As regards an increase in interest rates in the single currency bloc, which the president of the European Central Bank tipped as likely next month, Roubini said that he believed it would exacerbate the sovereign debt problems of the periphery states.

Asked whether he thought that Germany had become too powerful within the eurozone, Roubini said he believed that the current economic and financial tensions between eurozone member states would remain.

"The periphery needs a weaker euro, an easier monetary policy, needs a slower rate of fiscal austerity but the markets in the centre are imposing the opposite," he noted.

© 2011 AFP

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