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Page last updated at 09:38 GMT, Friday, 6 May 2011 10:38 UK

Roubini: 'Double dip risk' in eurozone


The European Central Bank (ECB) is risking a double dip recession in the periphery of the eurozone if it continues to increase interest rates, economist Professor Nouriel Roubini has warned.

Continuing economic contraction in Greece, Spain, Ireland, Portugal and Italy will be exacerbated by the ECB's policy of tightening its economic policy, he said.

"Unfortunately the ECB has started to increase interest rates, these increasing interest rates are leading to a strengthening of the euro," he argued on the Today programme.

"The euro becoming stronger and stronger is preventing the resumption of economic growth.

"If there is not going to be economic growth their [peripheral eurozone economies] own fiscal problems - too much public debt, too much private debt - will never be resolved.

"A weaker euro would help them to grow out of their own recessions. Maybe the ECB is tightening to much, too fast, too soon."

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