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European bailout was not enough to save the euro

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Petros Giannakouris/AP

(Read caption) The European bailout did not keep the euro from sliding further amid market uncertainty.

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The euro isn’t catching any breaks these days. It’s today fallen below $1.23, its lowest level since April 2006. NYU professor and Roubini Global Economics chairman Nouriel Roubini believes that the crisis in Europe is just getting started with Greece and more problems are already cropping up.

Bloomberg reports:

“The European Union’s 750 billion-euro ($931 billion) rescue package to stop contagion from Greece hasn’t calmed the markets while questions remain about whether governments are strong enough to implement the austerity measures required, Roubini said. The European Union said today it has transferred the first instalment of emergency loans to Greece, one day before 8.5 billion euros of bonds come due.

“Markets remain concerned about the solvency of some European countries as there is ’significant economic and financial trouble in the eurozone,’ Roubini told the BBC’s ‘Today’ program. The recent riots in Greece in response to fiscal cuts have fueled doubts about some European governments’ ability to solve these problems, he said.

“’There’s a question mark whether we can be confident the government is going to be strong enough to do the fiscal austerity,’ Roubini said.”

The bailouts have begun to rain down on Greece from the European version of Bernanke’s helicopter, and there should be motivation for the austerity measures to take hold. Yet, the citizens are fighting their diminished government support tooth and nail as they’ve grown accustomed over time to expecting handouts. It doesn’t bode well for the rest of Europe’s already shaky states — or the European Union itself — if Greece manages to fumble this bailout.

To read more of Roubini’s thoughts visit Bloomberg’s coverage of how the Greek crisis is only the tip of the iceberg.

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