5 Nouriel Roubini Predictions

3. Eurozone Fragility 2020-to-date 

Roubini is concerned about the structural weakness within the Eurozone. According to the economist, the common currency, monetary policy, and fiscal discipline present significant issues that could hurt the block’s economy. The economist insists the block cannot rely on a common currency as it lacks labor mobility, wage flexibility, fiscal transfers, and political integration.

Consequently, he worries that the common currency does more harm than good in preventing countries from adjusting rates to correct imbalances. Therefore, countries like Greece, Italy, and Spain have lost their competitiveness in the block compared to Germany and France.

The fact that the European Central Bank sets interest rates for the entire block is also a big problem as it does not reflect the economic situation in the individual countries. Roubini insists that any monetary policy out of the ECB ends up being tight for periphery countries, consequently triggering low growth and high unemployment.