O.E.C.D. Sees Euro-Zone Crisis Hurting World Recovery
A homeless man sleeps on a sidewalk as a pedestrian walks by in Athens, Sunday, May 20 2012.
PARIS. (ΝEW YORK TIMES). — Global stocks rose on Tuesday, even as the Organization for Economic Cooperation and Development cut its growth forecast for the euro zone and said Europe risked creating a self-sustaining cycle of decline that could have dire effects for the world economy. Pier Carlo Padoan, the O.E.C.D.’s chief economist, warned that Europe risked creating “a vicious circle, involving high and rising sovereign indebtedness, weak banking systems, excessive fiscal consolidation and lower growth.”
Such an eventuality would be felt beyond Europe’s borders, “with very serious consequences for the global economy,” Mr. Padoan wrote in an O.E.C.D. economic report.
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