Roubini: Spain the Battle Ground for the Future of Europe

Bloomberg reports:

Spain needs to prepare for “hard times” to reduce its growing budget deficit, New York University Professor Nouriel Roubini said in an opinion piece published today in El Economista.

“It’s true that Spain is not Greece, yet it’s not Ireland either, but if such an important economy is unable to stop the deficit slip toward the debt levels of Greece, the distinctions will end up being merely academic,” Roubini wrote in the Madrid-based newspaper.

Spain needs to carry out reforms that will tackle the rigidity of the labor market and salaries to regain competitiveness, Roubini said. The initial spending plan by Spanish Prime Minister Jose Luis Rodriguez Zapatero to end the recession “intensified Spain’s fiscal problems,” Roubini wrote. The future of Europe is at risk, the professor said.

“If Spain succumbs, it will drag with it the future of the European monetary union and decades of political credibility in Brussels,” Roubini said in El Economista. “In the long term, a country could be forced to leave the euro zone,” he said. For those reasons, Spain has become “the battle ground for the future of Europe.”