20/04/2013
Nearly five years after the financial crisis started, the International Monetary Fund (IMF) has issued a warning about the increasing fragmentation of the global economy, the very visible split between the dynamism of emerging countries, the US’ resistance and the persistent weakening of the eurozone. In figures, the grim picture painted by the IMF in its 16 April report, look like this: global GDP estimations have been lowered and it is now predicted to be 3.3% this year, compared with the 3.5% predicted in January. To no one’s surprise, the eurozone is still a major cause of concern for the Washington-based institution – which holds its general assembly this week. In the short term, risks mainly stem from the evolution of the eurozone, in particular “inconclusive elections in heavily indebted Italy and the problematic Cyprus bailout,” the IMF wrote. What is more, the current swarm of savings plans in Europe has the IMF worried about a “fatigue” linked to austerity and the ever-increasing gulf between eurozone countries, which could complicate things for setting up a banking union. And that is far from being the only problem detected by the IMF. Europe is the only region in the world that is in a recession and is growing weaker compared to the rest of the world, which does not help when trying to get countries to cooperate and trying to find global solutions.
