World Economy on Brink of Recession

11/03/2011 19:39

TheParliament

A key new report says the global economy is "on the verge" of a new recession.

It warns that this will "delay economic recovery and may ignite more social unrest".

Its publication comes as the Greek prime minister George Papandreou is set to hold emergency talks with French president Nicolas Sarkozy and German chancellor Angela Merkel on Wednesday.

The crisis meeting between the three leaders comes ahead of the G20 summit starting in Cannes, France, on Thursday.

On Monday, Papandreou made the surprise announcement that Greece would hold a referendum on the eurozone rescue plan agreed by EU leaders last week.

Markets fell sharply on Tuesday as it raised fears the deal could collapse.

The eurozone crisis is set to dominate the two-day G20 gathering in France.

Ahead of the G20, the International Labour Organisation (ILO) launched the 'World of work report 2011', one of its annual flagship reports.

The ILO says its report shows that the global economic outlook has deteriorated since 2010, with challenges "particularly acute" in advanced economies.

It says that employment growth continues to be "tepid" and "quality" jobs remain a premium in all regions.

The report says, "Unless the G20 takes decisive measures in Cannes, the world is facing a double dip jobs recession that could last for a decade, and increased social unrest.

"The window of opportunity to put in place measures needed to avoid this scenario is no more than six months."

The ILO's recommendations to this week's G20 summit include implementation of job creation plans, an increase in credit to enterprises (particularly SMEs) and wage increases "where possible".

It says there are 9.4 million long-term unemployed in the EU and that nearly all EU countries are showing an "increased risk of social unrest".

The organisation says that to offset such problems, member states "need to create another 4.6 million jobs to reach pre-crisis levels".

The report calls for maintaining and in some cases strengthening "pro-employment" programmes, warning that efforts to reduce public debt and deficits have often "disproportionately" focused on labour market and social measures.

Raymond Torres, director of the ILO, said, "We have reached the moment of truth. We have a brief window of opportunity to avoid a major double-dip in employment.

"It is now urgent that priority is given to jobs and the real economy."


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