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OECD Warns World To Be Ready 'To Face the Worst'
Source: Agencies |
November 29, 2011, Tuesday
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Print Edition
Print Edition
THE Organization for Economic Cooperation and Development said yesterday that policy makers around the world must "be prepared to face the worst," as the economic impact of Europe's debt crisis threatens to spread around the developed world.
The Paris-based OECD said in its latest Economic Outlook that continued failure by European Union leaders to stem the debt crisis that has spread from Greece to much-bigger Italy "could massively escalate economic disruption" and end in "highly devastating outcomes."
The half-yearly update also recommended urgently boosting the EU bailout fund and called on Europe's central bank to do more to stem the crisis.
"The ECB has the means to provide a credible measure to avoid further contagion in the sovereign bond markets," ECB Chief Economist Carlo Padoan said. "And if you ask me if that is the lender of last resort function, I would say yes."
Many think the ECB is the only institution capable of calming frayed market nerves and German Chancellor Angela Merkel's continued dismissal of a greater ECB role hit market sentiment and stocks in Europe fell again.
Potentially, the ECB has unlimited financial firepower through its ability to print money. However, Germany finds the idea of monetizing debts unappealing.
The Paris-based OECD said in its latest Economic Outlook that continued failure by European Union leaders to stem the debt crisis that has spread from Greece to much-bigger Italy "could massively escalate economic disruption" and end in "highly devastating outcomes."
The half-yearly update also recommended urgently boosting the EU bailout fund and called on Europe's central bank to do more to stem the crisis.
"The ECB has the means to provide a credible measure to avoid further contagion in the sovereign bond markets," ECB Chief Economist Carlo Padoan said. "And if you ask me if that is the lender of last resort function, I would say yes."
Many think the ECB is the only institution capable of calming frayed market nerves and German Chancellor Angela Merkel's continued dismissal of a greater ECB role hit market sentiment and stocks in Europe fell again.
Potentially, the ECB has unlimited financial firepower through its ability to print money. However, Germany finds the idea of monetizing debts unappealing.
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