Bailout countries in line for debt reduction deal - Citi economist

Mr Buiter - a former member of the Bank of England's rate setting Monetary Policy Committee - said the outcome of the British general election was also a risk factor, as it could increase the prospects of Britain leaving the European Union.  

The situation in Ukraine was another risk to the European economy, which already faces a "poor outlook", he added.

On the global economy, a key risk factor was a slowdown in China, both in the wider economy and in the property sector.

However he said the big fall in oil proces will act as "a tax cut" in oil importing countries, such as most of Europe, and this will be a stimulus for their economies.

Citi forecasts Ireland will continue to see economic growth above 5% in the next few years.