Attempts to bail out the Irish banking sector via multinational loans will only increase debt burdens in Europe and lead to a nightmarish scenario there, says New York University economist Nouriel Roubini.



There is too much private debt in Ireland, and aid from the International Monetary Fund, the European Union or whoever merely amounts to pushing the payday down the road and ultimately increasing the total amount owed in the end.



"Now you have a bunch of super sovereigns – the IMF, the EU, the eurozone — bailing out these sovereigns," Roubini tells CNBC, adding nobody "from Mars or the moon" will bail out the IMF or the eurozone once Ireland's debt is socialized.



"At some point you need restructuring," he told CNBC. "At some point you need the creditors of the banks to take a hit — otherwise you put all this debt on the balance sheet of government. And then you break the back of government — and then government is insolvent."



Greece, Portugal and Spain will need aid as well, with Spain causing a huge concern.



"If Spain falls off the cliff, there is not enough official money in this envelope of European resources to bail out Spain. Spain is too big to fail on one side — and also too big to be bailed out."



Ireland is coming under pressure from other European countries to accept billions of euro in loans to help its banking sector, sparking fears of contagion to other European countries.



"We are now at a point where decisions have to be taken," says George Papaconstantinou, Greece's finance minister, according to Reuters.

"Time is of the essence."



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