Roubini: European Debt Crisis Is More Serious Than Lehman Bankruptcy.

World-renowned

The possibility of "complete collapse" of European economy is 15% - 20%

Professor of the Business School of New York University, called "Dr. doomsday".

Christopher Flowers, a well-known private equity fund manager, also said that the European debt problem is "very tricky" and is the biggest problem of the world economy.

Guy Hans, President of a private equity firm in London, said that the possibility of a 15% to 20% Euro economy is in a "complete collapse", that is, a large number of banks have gone bankrupt, a number of countries have default on their debts, and the overall living standard has declined.

Investors are dissatisfied with the willingness and pace of European policymakers in dealing with the European debt crisis.

Flowers believes that European policymakers must make difficult choices and introduce effective measures, otherwise Europe and the world will be hard to get through.

Because of the high correlation between European banking system and government debt, the sovereign debt crisis has caused systemic risks in European banking industry.

The credit default swap (CDS) prices of European banks are close to the level of the 2008 financial crisis as yields on Greece, Italy and Spain hit record highs.

Flowers, who has ample investment experience in Europe, said the situation facing the European banking system is already very grim, and the interbank lending market is basically "stagnant water".

"Even a reputable bank can hardly borrow money," he said.

Once a crisis occurs, the global financial market will be turbulent.

Wilbur Ross, a prominent private equity manager, points out that a serious reliance on wholesale financing is also a major reason for the fragility of the European banking system.

Private equity funds forced to invest in contraction

In the context of the European debt crisis, the world economic outlook is worrying, and the tightening of bank credit has led to the contraction of private equity investment.

According to Henry Clarvis, founder of private equity fund, the cost of private equity financing has risen since April this year, forcing the fund companies to reduce the amount of borrowing and cash flow when buying.

In addition, Flowers said that the fund company has reduced or even stopped buying and investing because of the uncertain future of the European debt crisis, holding large amounts of cash and capital for rainy days.

Hans said that in view of the current financing and economic environment, private equity fund companies should reduce their ROI from 25% to 30% to 20%.

He believes that in the next 18 months, the life of private equity companies will not be too good.

Greek Finance Minister

No debt default in October

Comprehensive Xinhua news agency, Greek Deputy Prime Minister and Minister of finance Venizelos reiterated 27 days that Greece will receive sixth rescue loans from the European Union and the International Monetary Fund in time, and will not default on debt in October.

Venizelos said at a press conference held at the Treasury building on the day that Greece will fulfil its commitments made in the three year rescue loan granted by the European Union and the International Monetary Fund in 2010 to complete the tightening targets of controlling fiscal deficits and restoring economic growth.

He said: "I believe that as long as Greece fulfills all commitments, the sixth rescue loans will be issued in time.

But the problem is not just sixth rescue loans, but also a series of decisions made by eurozone summit this July 21st to protect Greece and the euro zone.

The European Union and the International Monetary Fund reached an agreement with the Greek government in May last year to provide 110 billion euros (US $151 billion 700 million) aid in batches.

In early September this year, the European Union, the European Central Bank and the IMF inspection team left Greece because of dissatisfaction with Greece's commitment to reduce debt levels, and sixth loans were blocked.

The Greek government estimated that if sixth instalments could not be put on time, Greece would break its revenue in mid October.

To secure loans, the Greek parliament took action on the 27 day to approve the Levy of property tax, which will be suspended until 2014.

German Chancellor

Will continue to assist Greece

According to Xinhua news agency, Berlin, September, 27, German Chancellor Merkel met with visiting Greek Prime Minister Papandreou at the prime minister's office on 27 th. He stressed: "we hope to have a strong Greece in the euro area, and Germany is willing to provide all necessary help".

Papandreou visited Germany at the invitation of the German Federation of industry, and he also sought support for Greece's latest 8 billion euro loan in Berlin.

Merkel said: "we believe that Greece has a high sense of responsibility to implement the requirements and expectations of the International Monetary Fund, the European Central Bank and the European Commission.

The euro is closely linked to us. We are committed to close cooperation among the members of the euro area. Without the convergence of economic policies and fiscal policies based on the EU stability and growth pact, there will be no better future for the euro.

Papandreou said Greece will implement the financial assistance requirements of the international community and adopt reform measures to rebuild the competitiveness of the economy.

Chairman of the European Commission

Greece to stay in the euro area

According to Xinhua news agency, Jose Manuel Barroso, the chairman of the European Commission, insisted that Greece stay in the euro area on the 28 th, but said that the latter must fulfill all reform commitments.

Barroso made a speech in the European Parliament on the same day, refuting rumors about Greece's withdrawal from the euro area.

"Greece is, and will remain, a member of the eurozone," he said.

But Barroso stressed that Greece must honour its commitments and that Europe will not let Greece down. "Other euro zone members have already committed themselves to supporting Greece and supporting each other."

Greece is actively taking action to seek loans from the European Union and IMF on time, so as to avoid countries falling into debt default.

Speaker of Slovakia

Greece should be bankrupt.

Shenzhen Special Zone Daily reported that according to the "voice of Germany" website, Sulik, President of the parliament of Slovakia, stressed again in September 28th that Greece should be bankrupt.

According to reports, the chairman of the new liberal party, the liberal and SaS, said in a German television morning column program that Greece can only recover after a real fiscal tightening.

The EU's rescue plan is only a "ridiculous way to buy time", which does not solve the problem, he said.

Sulik said that the euro will not be difficult to sustain because of Greece's bankruptcy. On the contrary, the bigger risk is that the euro zone countries will continue to increase their debts.

He warned that the risk of coexistence could not afford "rich countries" sooner or later.

The Slovakia speaker said that "maintaining solidarity with Greece" is an absurd argument, and the relevant rescue efforts are a "wrong unity".

(Zhong Xin)

international observation

European debt relief or re regulation

Can two trillion Euro cover the bottom?

As the euro zone sovereign debt crisis intensified, euro zone powers such as Italy and Spain were also threatened.

With the spread of the crisis, the size of the original salvage funds has been insufficient.

27, there are rumors that euro zone countries are considering expanding the existing temporary rescue mechanism, namely the European financial stability mechanism, from the current 440 billion euros ($600 billion 200 million) to 2 trillion euros (US $2 trillion and 700 billion).

Although the rumor has not yet been confirmed, whether the 2 trillion euro is enough to cover the spread of the European debt crisis is worth exploring.

Rumors will help to increase firepower.

Analysts generally speculate that France's new proposal to curb market speculation against the euro is likely to involve further reform of European financial stability instruments.

The news about the size of the European financial stability tool will be broadened to 2 trillion euros.

Ollie Ryan, member of the European Commission responsible for economic and monetary affairs, also said recently that the EU is considering improving the leverage ratio of financial stability tools in Europe, so as to enhance "firepower" to rescue the stranded countries and to build a better financial firewall for those countries that take the right measures.

Again, the intention to increase capital is not good enough.

But with the spread of the crisis and the continuous depletion of the bailout funds, the eurozone countries have to repeatedly replenish the "firepower" of the European financial stability tools, which highlights the deepening of the European debt crisis.

There is only one reason to consider increasing capital again. That is to prevent the loss of Italy and Spain.

The economies of Italy and Spain are much larger than those already rescued, especially in Italy. Once the crisis is in crisis, European financial stability tools will be hard to sustain on the existing scale.

Increasing capital is harder to cure.

Although the 2 trillion Euro sounds very powerful, the way to increase capital is not necessarily easy.

In the past, the euro zone countries have been fighting hard to improve the practical financing ability and flexibility of European financial stability instruments. It has not been fully implemented for months and has not been fully implemented. It is not easy to expand to 2 trillion euros in one move.

There is little hope that Germany and other countries with stronger European economies will pay more money. The popular argument is that leverage is based on the European financial stability tools to expand lending capacity, but a director of the international credit rating agency, standard & Poor's, warned that the proposal to increase the European financial stability tool could have a negative impact on the credit rating of the euro zone member states.

According to market rumors, Spain's chancellor of the exchequer Elena Salgado poured cold water on the 27 day.

She said there was no plan to expand the scale of European financial stability to 2 trillion euros.

German finance minister Wolfgang Schauble said the unlimited expansion of European financial stability tools would jeopardize the credit rating of Germany and France and the tools themselves.

More importantly, as a means of emergency, the European financial stability tool is basically an expedient measure for the euro zone countries to gain time.

After taking emergency measures, it is more important to find fundamental measures to consolidate the European financial situation and ensure long-term fiscal stability.