Roubini says Greece needs orderly debt restructuring to avoid 'inevitable default'

He said the "draconian" austerity measures agreed as part of a €110bn (£90bn) EU-IMF bailout is prolonging the country's recession.

"It is time to recognised that Greece is not just suffering from a liquidity crisis; it is facing an insolvency crisis too," he writes in the Financial Times.

Greek debt is being downgraded to junk levels, making it harder and more costly for the government to borrow.

In return for the emergency loans, Greece has pledged to bring its fiscal shortfall under the EU's 3pc by 2014 from 13.6 percent last year and to implement structural reforms in its economy to make it more competitive. (more)