World Bank: Europe is ruining everything
What happens in Athens doesn’t stay in Athens, sadly.
Ah, Europe.
We love you for your rolling landscapes, your rich history, your 17 million varieties of wine and all that stinky cheese.
But, increasingly, we hate you for your lame economic policy, your maddening political intraction, your rising debt and your faltering currency.
Those sentiments were pretty well echoed by the World Bank today, which — in its lovably wonkish way — says the euro zone crisis is ruining just about everything in the global economy, particularly for developing countries.
Here's how the bank put it in its updated Global Economic Prospects (GEP) 2012 report:
"Developing countries should prepare for further downside risks, as Euro Area debt problems and weakening growth in several big emerging economies are dimming global growth prospects."
So the World Bank today suggested that economic policy makers take steps now to mitigate those risks; namely, by learning to live with what's likely to be long-term pain:
“Where possible, developing countries need to move to reduce vulnerabilities by lowering short-term debt levels, cutting budget deficits and returning to a more neutral monetary policy stance, said Andrew Burns, Manager of Global Macroeconomics at the World Bank. "Doing so will provide them with more leeway to loosen policy, should global conditions take a sharp turn for the worse."
The euro doom and gloom comes after a relatively positive first four months of the year for the global economy.
But, thanks to our troubled friends in Europe, it's time now to batten down the fiscal hatches the World Bank warns.
And, no, it's not going to be easy:
“Global capital market and investor sentiment are likely to remain volatile over the medium term – making economic policy setting difficult. In this environment, developing countries should focus on productivity-enhancing reforms and infrastructure investment instead of reacting to day-to-day changes in the international environment,” said Hans Timmer, Director of Development Prospects at the World Bank.
Have a nice day.