(Bloomberg) — Dr. Doom got it wrong.
The parade of economists and investors led by Nouriel Roubini predicting Greece’s ejection by now from the euro zone failed to appreciate the resolve of European policy makers to protect their union and the amount of pain Greeks are willing to stomach.
“People underestimated these factors,” Roubini, chairman of New York-based Roubini Global Economics LLC, said in a telephone call 12 months after predicting Greece’s exit in remarks to the 2012 World Economic Forum’s annual meeting in Davos, Switzerland. A Greek departure “is certainly a less likely event this year, although not a zero probability.”
…The pessimists may be changing only their timing rather than their tune. While Roubini now attaches a 30 percent chance to Greece leaving in 2013, the probability increases to more than 50 percent in three to five years. Having once identified a 90 percent likelihood of a Greek exit by 2014, Citigroup economists maintain it will happen within two years as their base case.
“Politics don’t trump everything,” Roubini said. “It’s a factor, but it’s not as if it overrides everything else.”
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