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 I've been called an abusive and dangerous parent, when all I did was listen to my transgender child
- 2 Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
- 3 Sofyen Belamouadden murder: The inside story of a crime that horrified Britain
- 4 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 5 Ian Brady: Moors murderer announces his support for Ukip and the SNP
Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
Russian hack of President Obama's emails worse than previously admitted
Ian Brady: Moors murderer announces his support for Ukip and the SNP
UK weather: Britain braced for snow to replace sun as arctic air mass moves in
Nepal earthquake: US Pastor Tony Miano sparks outcry by suggesting Nepalis should convert and not rebuild their 'pagan shrines'
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove
iJobs Money & Business
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...
£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...