International economists are warning that Europe is facing a severe recession that could hurt the United States as well.
Although world leaders keep touting remedies to the European debt crisis, their so-called solutions haven't worked.
This week, stock market guru Nuriel Roubini called the situation in the eurozone "a slow motion train wreck," one that isn't going away.
Economist Peter Morici agreed.
"We could easily see Europe slip into Great Depression type conditions," Morici said. "Spain is already near there."
At risk is a global chain reaction: If Greece defaults on its debt, it could begin a domino effect of bank failures across Europe, bringing down weak eurozone countries and eventually spreading to Wall Street.
"We [the United States] could be easily pulled into this vortex," economist Robert Brusca warned. "It wouldn't take that much to tip the U.S. economy over."
Experts say a meltdown in the eurozone could cause problems for the U.S. economy in several ways, including the following:
- Loan defaults. European banks won't be able to repay loans to U.S. lenders.
- Drop in Demand. Europe purchases huge amounts of American goods. If the European economy weakens, they'll buy less from the United States.
"We'd also see European exports on world markets at rock bottom prices," Morici noted. "And that would make life very tough. For instance, GE would have a lot of trouble competing with Seimens."
The U.S. recovery has been slow, and a eurozone meltdown would make America's already weak economy worse.