Thursday, June 12, 2014

Nouriel Roubini on Eurozone economic and political effects

Economic insecurity for the working and middle classes is most acute in Europe and the euro-zone, where in many countries populist parties, mainly on the far right, outperformed mainstream forces in last weekend’s European Parliament election. As in the 1930s, when the Great Depression gave rise to authoritarian governments in Italy, Germany, and Spain, a similar trend may now be under way.

If income and job growth do not pick up soon, populist parties may come closer to power at the national level in Europe, with anti-European Union (EU) sentiments stalling economic and political integration. 

Worse, the eurozone may again be at risk: some countries, such as the UK, may exit the EU; others (Spain and Belgium) eventually may break up.