Roubini Sees Reduced Threat of Euro Breakup

The risk of a breakup in the euro area is lower than a year ago, Nouriel Roubini, the economist who predicted the global financial crisis, said.

The risk of deflation in advanced economies has also fallen, Roubini, the co-founder and chairman of New York-based Roubini Global Economics LLC, said at a conference in Shanghai today.

European Union leaders reached agreement on July 21 on a second rescue package for Greece worth 159 billion euros ($230 billion) and strengthened the region’s bailout mechanism to offer protection to other euro-region nations in a bid to stamp out contagion from the sovereign debt crisis. Spanish Prime Minister Jose Luis Rodriguez Zapatero said yesterday the accord is “solid and detailed.”

Roubini’s comments at a forum in the Chinese city today echoed a speech he gave in Bucharest on May 26 when he said risks to financial markets, including the breakup of the euro area, have lessened in the last year as growth has shifted from recovery to “expansion.”

Bloomberg