Tags: Stiglitz | Risk | european | Recession

Stiglitz Sees ‘Significant’ Risk of European Recession

Wednesday, 23 Nov 2011 06:49 AM

Europe is about to fall back into recession and is already showing signs of suffering from economic contraction, says Nobel economist Joseph Stiglitz.

"There's a significant likelihood that Europe will be facing a recession, there are already signs of economic downturn," Stiglitz tells Bloomberg Television.

Slashing government payrolls will only exacerbate the problem.

"The driving force though is the austerity that is spreading around Europe and America."

Governments need to do their part when it comes to spending and budgeting, Stiglitz adds, pointing out that the Central Bank of Europe, like the Federal Reserve in the U.S., has done its part.

"There has to be a creation of new fiscal frameworks, a solidarity fund for growth and stability."

More and more recession warning flags are flying these days.

A survey put out by financial information company Markit shows the 17-member eurozone economy contracted for the third month running in November, according to Reuters.

Markit's monthly composite purchasing managers index — a broad gauge of business activity — rose to 47.2 in November from 46.5, it remains below the 50 mark, the threshold between expansion and contraction.

Periphery countries aren't the only ones suffering, as bigger countries are starting to cool down as well.

"As feared earlier in the year, malaise has spread from the periphery to the core," says Chris Williamson, Markit's chief economist, according to Reuters.

"Even Germany is stagnating and France contracting by around 0.5 percent."

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Europe is about to fall back into recession and is already showing signs of suffering from economic contraction, says Nobel economist Joseph Stiglitz. There's a significant likelihood that Europe will be facing a recession, there are already signs of economic downturn, ...
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Wednesday, 23 Nov 2011 06:49 AM
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