OECD warns on Europe's economy

AP News
|
Posted: Oct 31, 2011 9:40 AM
OECD warns on Europe's economy

Eurozone economies will see a "marked slowdown" next year, the Organization for Economic Cooperation and Development warned Monday, as it called on the European Union to clarify its anti-crisis measures.

In an update of economic forecasts timed to coincide with this week's meeting of the Group of 20 major economies, the OECD said "patches of mild negative growth" are likely in the eurozone in 2012.

It predicts economic growth in the eurozone will stall at 0.3 percent next year, after just 1.6 percent growth this year. That's down from the OECD's forecast in May of 2 percent growth in the eurozone in 2012.

"Detailed information is needed" on how the EU will implement the package of measures announced last week aimed at resolving the European debt crisis, the Paris-based OECD said.

The U.S. economy will grow 1.8 percent next year after 1.7 percent growth in 2011, the OECD said, well below the 3.1 percent growth the OECD forecast in May.

The OECD said much of the blame for the current economic slowdown was down to "a generalized loss of confidence in the ability of policymakers to put in place appropriate responses."

That reads as a slap to European leaders who've attempted for nearly two years to get a grip on the widening sovereign debt crisis that began in Greece, has drawn in Ireland and Portugal and now threatens Italy and Spain.

Eurozone crisis measures unveiled last week "go in the right direction," the OECD said, but it called on European leaders to provide more specifics on how their plan will work.