With Russian economic growth threatened by Eurozone debt concerns Business RT spoke with Professor Patrick McNutt from Manchester Business School about the possible outcomes.

RT: Will the debt crisis in the euro zone hurt financial markets the way Lehman Brothers did following its collapse?

PN:”Indeed there is every possibility that it could, and we have to be very careful that this Euro crisis is structured carefully.However having said that if you look at the value of the Euro in the foreign exchange markets, it is sitting around 40 to the rouble, $1.42 to the US dollar, and around 87 pence sterling. So, at the moment the crisis has not filtered into the foreign exchange market.Having said that, however, we do need to see some resolution of the situation sooner rather than later.”

RT: Europe is suffering from the economics of insolvency – both public and private. What should the done?

PN:“One approach is to delist the insolvent banks completely, and remove what is the bank debt off the sovereign debt.In many countries, including my own country of Ireland, and Portugal and Greece, part of the issue is that the bank debt, the insolvency of the banks, has been wrapped inside what is effectively public sector debt.If we can separate that, one clear solution would be to delist the banks completely and stop trading in their shares on the European stock market.

It is very dramatic, but we can do it.We can do it with private sector companies all the time.There are debt obligations we can put in place.I cannot see why we cannot do the same for what is sovereign debt.But Europe is afraid of what effectively would be a default.But the solution to wait until 2013 is too long in my view.”

RT: Greece pays roughly 10 percent of its GDP in interest costs alone and is staring at a likely third straight year of GDP contraction. Can Athens avoid a default without more bailout funds?

PN:“Probably not, and this is a serious concern for the Greeks.The bigger concern for Europe is should we allow Greece to depart from the euro.That would destabilize the Euro, so Greece has to commit to very serious reform.There is some political move towards that but the sooner they do it the better.When you think about it even if Greece were to restructure their debt by 50% of GDP, it would take them quite a long time to recover natural growth rates as an economy.”