Weak eurozone threatens global economic growth: OECD
The
Organization for Economic Cooperation and Development says the
eurozone's struggling economy is a threat to global growth. (File photo)
Tue Nov 25, 2014 4:7PM GMT
The
Organization for Economic Cooperation and Development (OECD) says the
weak eurozone economy poses a major threat to global economic growth.
The France-based OECD made the warning in a report released on Tuesday."The euro area is grinding to a standstill and poses a major risk to world growth, as unemployment remains high and inflation persistently far from target," the report said.The organization added that the eurozone members have underperformed over the past 10 years and may remain in stagnation unless more flexibility is shown in applying fiscal reforms.
It said struggling member states such as France and Italy, who have submitted figures falling short of European Union criteria, “would likely depress activity further and even risk tipping the euro area into another recession."
The OECD, which provides economic analysis and advice for 34 industrialized member states, has warned that insufficient policy stimulus could be undermining potential growth.
Paris is to expect a deficit of 4.3 percent of gross domestic product (GDP) in 2015, higher than the three-percent EU ceiling.
The organization also said Italy’s pace to reduce its debt was sluggish.
OECD urged the European single currency zone to "slow down structural budget consolidation relative to previous plans to reduce the drag on growth."
This is while the European Commission is expected to deliver its verdict of member states’ budgets later this week.
Official figures show that eurozone countries had zero growth in the second quarter of this year.
Europe plunged into financial crisis in early 2008. The threat of insolvency has heavily plagued debt-ridden countries such as Greece, Portugal, Italy, Ireland, and Spain.
SZH/HMV/SS