Monday, June 20, 2011

Roubini: Greece and Portugal May Abandon Euro

Mr. Connected, Nouriel Roubini, says:
I don’t rule out that Greece and Portugal, if they aren’t able to recover competitiveness and growth and social tension further increases, may go back to the drachma and escudo on the wave of populist governments.
He is not saying it will happen this afternoon, but sometime over the next five years.

I think Roubini is right on here. There is no indication that Greece or Portugal will be able to handle their debt crisis outside of either a default or the printing of money. Since the EU appears very reluctant to print money, Portugal and Greece may do it on their own by returning to their own currencies.

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