DAVOS - New York University economist Nouriel Roubini, nicknamed "Dr Doom" for his gloomy predictions in the run-up to the financial meltdown four years ago, says the fallout from that crisis could last the rest of this decade.

Until Europe radically reforms itself and the United States gets serious about its own debt mountain, the world economy will continue to stumble along, said Dr Roubini, who is widely acknowledged to have predicted the crash of 2008, in an interview on the sidelines of the World Economic Forum.

He painted a grim picture of the euro zone in recession and key emerging markets in China, India, Brazil and South Africa slowing down. The biggest uncertainty is the possibility of a conflict with Iran over its nuclear programme - which could lead oil prices to spike to US$150 per barrel, and lead to a global recession, he said.

Calling for a major change in policy priorities, Dr Roubini said: "We have to shift our investment from things that are less productive like the financial sector and housing and real estate to things that are more productive like our people, our human capital, our structure, our technology, our innovation."

Slow growth in advanced economies will likely lead to "a U-shaped recovery rather than a typical V", and could last up to 10 years if there is too much debt in the public and private sector, he said.

At a panel discussion yesterday, Dr Roubini also said Greece will probably leave Europe's single currency within 12 months and could soon be followed by Portugal.

"The euro zone is a slow-motion train wreck," he said. "Not only Greece, other countries as well are insolvent."

Dr Roubini said he sees a severe recession in Europe and a 50 per cent probability "that over the next three to five years the euro zone will break up". Agencies