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Europe Troubles Are About to Start: Wilbur Ross

Austerity packages coming into force in Europe will only aggravate the euro zone's problems, Wilbur Ross, Chairman and CEO at WL Ross and Co., told CNBC Monday.

"I think the political troubles in Europe are all just about to start because the governments have all pledged about budget deficits," Ross said.

"But now comes the hard part - will there be more strikes, riots, etc. So I'm not sure it will be easy over the next few weeks," he added.

European stocks hit 4-week highs Monday, with risk aversion ebbingas investors seem more confident the euro zone's debt problems are likely to be solved.

Industrial output in the 16 members of the euro rose 0.8 percent month-on-month in April, jumping 9.5 percent year-on-year, the highest annual rise since measurements for the euro zone began in January 1991.

In the US, the government has stepped up pressure on the oil giant BP to deal with the oil spill from a well that rupturedon April 20 in the Gulf of Mexico.

Senate Democrats have written to the company, urging it to make a $20 billion initial deposit to a fund, as a good faith showing that they will not shirk their responsibility for the spill in the Gulf of Mexico.

"I think BP would do well to put money in escrow with the US government," Ross said. "I think they could afford to put up $20 billion figure. The issue for investors is that this may be the beginning, not the end of the problem. It's a political act, not an economic act."

A New York Times report that the United States recently discovered nearly $1 trillion in untapped mineral deposits in Afghanistansent shockwaves through the mining community.

- Watch the first part of Wilbur Ross' interview above and the second part here >>>

Huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so expansive that many believe this area could eventually be transformed into one of the most important mining regions in the world.

But the security risks in Afghanistan are too high, according to Ross. "We would not be an investor in Afghanistan, given everything that’s going on there," he said.

Contact Europe: Economy

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