OECD: The Eurozone entered a recession threatening the economies of the U.S. and Japan

The economic crisis in the Eurozone is about to plunge the developed economies into the abyss of recession, or even depression, states the six-month report on the global economic outlook of the Organization for Economic Cooperation and Development (OECD). According to the Organization, the Eurozone is already stuck in mild recession and even a minor mistake could plunge the U.S., Japan and other developed economies into a grim economic downturn. Thus, the final results of "a potentially very negative event in the Euro area" could be "quite devastating", according to the estimates.

The too stringent fiscal policy pushes the U.S. economy to stagnation, while the crisis in the Eurozone is the key risk for the global economy at the moment. Therefore, experts are also revising downward their outlooks for economic recovery. For example, the growth of world economy will continue to deteriorate, reaching 3.8% in 2011, compared to the May forecasts for a growth increase of 4.2%. For 2012, the outlook is for a mere 3.4% growth of GDP, compared to the previously forecasted 4.6%.

The prospects for the U.S. are also not favourable - its economic growth was reduced from 2.6% to 1.7% this year and from 3.1% to 2% next year. OECD also downgraded its outlook for the Euro area - the expected GDP growth for 2011 is barely 1.6% instead of 2%, while in 2012 it will be only 0.2%, compared to the expected 2%. Experts believe that the Monetary Union will mark a painful growth of 1.4% in 2013.

This data is even more pessimistic than the assessments of the European Commission, which warned that the recovery of the EU economy had reached a standstill. Brussels set a 1.5% GDP growth in the EU member-states using the Euro currency and 0.5% growth next year. "There is a risk of new recession, if no decisive actions are taken," warned EU Commissioner for Economic and Monetary Affairs Olli Rehn at the presentation of the forecast.

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