The risk of contagion is still high and Europe must do more to avoid the anointing. The picture outlined by the International Monetary Fund (IMF) in a report dedicated to the repercussions of the economic policies of five systemic economies (United States, China, the euro area, Japan and the United Kingdom) is clear. The IMF believes that the actions taken within the euro area, "despite progress", do not appear to have been sufficient to stop the spread of stress and could jeopardize a global recovery already sluggish due to the market crisis financial.
In the worst case outlined, Eurozone GDP could fall by 5%, also for the United Kingdom the slowdown of the economy would reach the same level, while for the United States the impact would be around -2% of GDP. Also about Japan the shock would rebound by scoring a -1% in national income. Of course, if the five major economic powers were in a recession, economies around the world would suffer. The IMF's message is clear: European leaders must implement concrete actions quickly to avert these scenarios.
And yet, it is not only the Euro area that is frightening the Monetary Fund. The United States must avoid missing $4.000 trillion in tax relief and triggering automatic spending cuts next year, the so-called fiscal cliff. China fears a further slowdown in investment. Japan cannot continue to increase its already excessively high public debt. And the UK should take further steps to strengthen the financial system and trust in banks.
