Europe a Threat to World Economy: OECD

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Europe a Threat to World Economy: OECD

Europe a Threat to World Economy: OECD

The recession in Europe risks threatening the world’s economic recovery, OECD has warned. In its half-yearly report, the Organization for Economic Cooperation and Development said that protracted economic weakness in Europe “could evolve into stagnation with negative implications for the global economy.”
The OECD again slashed its forecast for the 17 European Union countries that use the euro, saying it will shrink by 0.6 percent this year, after 0.5 percent drop in 2012. The OECD had predicted a 0.1 percent decline for the eurozone in its report six months ago and this time last year, it forecast growth of nearly 1 percent for 2013.
Noting that eurozone policymakers have “often been behind the curve,” the OECD warned that Europe was still beset by “weakly capitalized banks, public debt financing requirements and exit risks.” Meanwhile, the eurozone’s 12.1 percent unemployment “is likely to continue to rise further … stabilizing at a very high level only in 2014,” the OECD said.

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