Experts warn of 'perfect storm' for global economy

"The history of Europe is a history of states," said Aznar, who led Spain from 1996 to 2004, a period of tremendous growth that seems an epoch away. "We must restrict this and not create another thing that does not work."

Better, he said quietly, was to ensure that countries take the "right decisions."

Some applied that label to one decision this week, a bond-buying plan from the European Central Bank that continued to lift financial markets on Friday.

But others noted that the offer by ECB president Mario Draghi is highly conditioned.

"The decision by the ECB is extremely important but ... the ECB is only one instrument (and) if governments do not do their part the ECB will not be able to succeed," said JPMorgan Chase International chairman Jocob Frenkel.

It was easier to find common ground on the question of the United States — with great concerns that country is headed toward another debt-ceiling crisis because regardless of the presidential election outcome Democrats and Republicans cannot agree on how to close a deficit that is digging an ever deeper debt hole.

"The largest economy of the world cannot continue this way without doing any kind of predictability about what is going to happen," said Babican. "We don't know much about the budget of 2012 and we don't know what kind of fiscal policy there will be in 2013. A fiscal cliff is coming."

Also clouding the atmosphere was the slowdown in emerging nations — including China, despite growth there that remains far higher than in the West.

"Seven percent growth may seem high, but for China, which had double-digit growth for 20 years, it really means bad news," said Li Cheng, a China expert from the Brookings Institute. He said there was risk of millions of layoffs which could spark "the largest crisis in (Communist China's) history because it may cause revolution."

The final element of what Roubini described as the "global perfect storm" is the possibility of an attack by Israel or the United States on Iran because "it's clear that negotiations have failed" on stopping Iran's nuclear ambitions. "The last thing the world needs given its fragility is another war in the Middle East and a spike in oil prices," Roubini said.

Israeli President Shimon Peres declined to address the Iran issue but sounded a philosophically optimistic note, suggesting that from his perspective at age 89, crises come and crises go. "Today what we call crisis is more of a profound change that we were not organized to meet properly," he said.

His solution was somewhat deflating to the audience, a graying crowd visibly given to collecting bulky stacks of paper: Hand things over to a younger generation — global, digital, and largely "not so impressed."

"They are better educated, better built, and more up to date."

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