Call for G20 leaders to be bold
Monday 31 October 2011
Bold action needs to be taken at the G20 summit this week to stave off the threat of another recession in Europe, a leading think-tank has warned.
The Organisation for Economic Co-operation and Development (OECD) slashed its growth forecasts for some of the world's biggest economies and said "without decisive action the outlook is gloomy".
In a rallying cry before the world's 20 richest nations meet in Cannes on Thursday, OECD secretary general Angel Gurria called on politicians to implement the eurozone rescue package sketched out last week "promptly and forcefully".
Meanwhile, the Treasury backed calls for the eurozone rescue deal to be properly implemented and claimed its austerity measures left the UK in a stronger position.
Mr Gurria warned of a "marked slowdown" in the eurozone area, with "patches of mild negative growth" likely in 2012 and said more bold decisions were needed to get the world economy back on track.
The OECD said economic growth in the eurozone will slow to 0.3% next year after 1.6% growth this year, and will remain weak in the US while emerging markets will see slower growth than before the financial crisis began.
Overall, growth in the G20 nations will slow to 3.8% in 2012, compared to 3.9% this year, although it should accelerate to 4.6% in 2013.
The OECD added that the scenario could be worse if the eurozone rescue deal fails to restore confidence in markets.
Last week EU leaders agreed with banks a 50% "haircut" on Greek debt and to boost the eurozone bailout fund to one trillion euro (£880 billion), which follows an earlier decision to shore up banks' finances.
A repeat of the financial crisis of 2007 could wipe 5% off major economies' GDP by the first half of 2013, the OECD added.
But it said a radical action plan by the G20 could help boost growth above its projections.
G20 nations need to make structural reforms to address unemployment and rebalance global demand, while interest rates in the eurozone should be lowered under new president Mario Draghi, the OECD added.
And it warned that the outlook would be gloomier if commitments made by EU leaders fail to restore confidence in the markets and one of the member countries defaults on its debts.
A spokesman for the Treasury said: "Good progress has been made recently by the eurozone to address the conditions it faces and, as the OECD states, it is important that this momentum is maintained.
"In this time of international uncertainty, the Government's action to tackle the deficit has put the UK ahead of the curve and is helping to mitigate against the risks that are weighing down on confidence elsewhere."
- 1 JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
- 2 The West has it totally wrong on Lee Kuan Yew
- 3 #FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
- 4 Video shows what happens when lava is poured onto ice
- 5 Cate Blanchett loses temper during interview: 'That's your f**king question?'
Andreas Lubitz: Who is Germanwings co-pilot who 'locked out captain and crashed flight 9525'?
Germanwings crash: The poignant final photograph taken by Iranian journalist on doomed flight after watching Barcelona play Real Madrid
#FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
Cate Blanchett loses temper during interview: 'That's your f**king question?'
Jeremy Clarkson calls on trolls to leave producer Oisin Tymon alone: 'None of this is his fault'
Nigel Farage brands LGBT activists 'filth' and 'scum' and accuses them of scaring away his children after they invade his local pub
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Russia threatens Denmark with nuclear weapons if it tries to join Nato defence shield
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Vote Ukip, says far-right group Britain First
iJobs Money & Business
£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...
£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...
£16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...
£50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...