Tuesday, July 19, 2011

IMF: Euro in shadow over EU debt crisis

ING chief economist Mark Cliffe

Source: Press TV

The International Monetary Fund (IMF) has warned in a report that the ongoing EU debt crisis has put the euro in a “shadow,” indicating that the currency is in jeopardy.

With European leaders struggling to agree how to divide the costs of another Greek rescue program, the IMF said on Tuesday that there was “no consistent road map ahead, leaving both orderly and disorderly outcomes on the table. The reaction by national authorities and economic agents has been one of retrenchment, threatening to turn back the clock on economic and financial integration, the very foundation of [the Economic and Monetary Union],” or EMU, The Washington Post reported.

Europe has been vexed by financial crisis as the 17-nation euro zone has been plunging into the abyss fissures between strong economies such as Germany, and weaker ones such as Greece, Ireland and Portugal, which risk being engulfed by historic levels of government debt.

European leaders will hold talks in Brussels on Thursday in an effort to develop a durable fix for the euro. Their summit has been dubbed the euro zone's “last chance saloon” by the London-based Capital Economics.

Leaders have not ruled out the possibility of a breakup of the euro zone, but they mentioned that such a move would end ambitions for a European currency to challenge the dollar as a world reserve and, depending on which countries stay in or leave the currency union, possibly would force a major reordering of world finances, the report said.

The discussion about the probable breakup was introduced to the IMF group since Greece's problems became acute in the fall of 2009.

In a study presented to the IMF, ING -- a financial institution of Dutch origin -- chief economist, Mark Cliffe, in London estimated that Greece's economic output might fall as much as 10 percent if it pulled out of the currency union, making the breakup really costly.

The IMF has cited the euro zone's problems as "perhaps the chief risk to the global economic recovery."

Analysts at Capital Economics said that "a very decisive response which could be applied not just to Greece but also to Spain and Italy" was essential. Otherwise, they said, the situation could become "irretrievable."

No comments:

Post a Comment

Thanks for commenting on this post. Please consider sharing it on Facebook or Twitter for a wider discussion.

Russia Today (Live)

World News 2017

South Front Military Review 2017

Syria - News 2017

US News 2017

The Russian Perspective

Debate – Global Issues 2017

Current Affairs - Important Interviews – 2017

Important Information 2016 - 2017

Yemen News 2017

Turkey News 2017

Ukraine News 2016 - 2017

Palestine & Israeli Crime 2017

Iraq News 2017

Iran News 2016 - 2017

Important Documentaries

Viewpoint, Discussion & Opinion - 2017

Abby Martin – Empire Files

Global Economic News 2017

Egypt News 2016 - 2017

Libya News 2016 - 2017

Bahrain News 2016 - 2017

Sheik Imran Hosein - Islamic Eschatology

George Galloway – Comment & Opinion

English FA Cup 2016 – 2017

New Age Weather

Space News

Music for the Revolutionary Mind

Global Revolution LIVE!

Watch live streaming video from globalrevolution at livestream.com

Japan’s 3 Nuclear Meltdowns STILL ongoing (News Censored)