World Bulletin / News Desk
The International Monetary Fund on Thursday called for a "policy game changer" in the euro zone to arrest the spread of the debt crisis it now says is clearly engulfing the entire currency bloc and its smaller neighbors.
An IMF spillover report that looks at how the economic policies of the so-called systemic five economies - the United States, China, euro zone, Japan and the United Kingdom - affect each other and the rest of the world said the euro area crisis was by far the biggest concern weighing on policymakers' minds.
The IMF said it had consulted 35 countries for the report including select number of emerging economies Brazil, Czech Republic, India, South Africa, Turkey, Russia, South Korea, Poland, Mexico and Saudi Arabia.
"Despite progress in the face of constraints, the sense is that not enough has been done to stop the spread of stresses and attenuate fiscal-growth-banking feedback loops," the IMF said of the euro zone's policy actions so far.
In a worst-case scenario simulated by the IMF, it found that euro zone output could be cut by five percentage points if policymakers did not act and the euro zone crisis worsened.
If the euro zone crisis intensified, the IMF estimated that the impact to the world's poorest countries would be somewhere between mild to severe, and could push up their external financing needs by some $27 billion by the end of 2013.
But the IMF said the euro zone was not the only global worry.
Weighing possible spillovers elsewhere, the IMF also said the United States must remove the threat of a so-called "fiscal cliff" in 2013, with $4 trillion worth of expiring tax cuts and automatic government spending reductions next year, and not enough fiscal adjustments over the medium term.
Most analysts believe that Congress will not act until after the congressional and presidential elections in November.
Of China, the IMF said there was a concern that slower investment, while necessary to rebalance demand to consumption, would hit trade partners and world prices. A one percentage point cut in Chinese investment growth would have a large impact on its Asian suppliers, while effects on Japanand Germany would also not be trivial, it added.
High public debt in Japan makes it vulnerable to an abrupt shift in market sentiments, while the United Kingdom should take further steps to fortify its financial system and underpin confidence in banks, the IMF said.
Ranjit Teja, the report's lead economist, said emerging economies had complained that easy monetary policy in the United States, Europe and Japan had created a surge in capital inflows, higher commodity prices and raised the risk of asset bubbles.
Teja said the impact of monetary easing measures was not clear-cut but it did not mean that emerging economies have not been affected.
The raise is expected to bring Israel's civil servants' salaries up to 5,000 shekels (around $1,282) from 4,200 shekels (roughly $1,076)
Russian sanctions have hit Lithuania's transport sector, which employs around 100,000, as well as its dairy industry.
The suspension comes as South Korea is struggling to contain its own outbreak of bird flu in birds.
Austrian Chancellor Werner Faymann justified the original sanctions as "a self-defence step", but added: "Our goal cannot be tightening the sanctions."
Both the European Union and United States adopted tighter restrictions on investments in Crimea this week, targeting individuals, Russian Black Sea oil and gas exploration and tourism.
Chinese Premier Li Keqiang said the offer included $1 billion for infrastructure, $490 million for poverty alleviation and $1.6 billion in special loans for China's production capacity export
Ukraine could default on its debt obligations if the situation does not change in the next few months, S&P said on Friday.
Damascus has relied on Tehran to fight its war with drop in oil price affects oil-producing Iran. Syrian traders say Damascus worried about future support
The ruble makes small gain Friday morning, but RTS index continues to contract
Norwegian energy company Statoil, which suspended 5 rigs in the last 2 months, granted $610 million for development of its gas fields
Putin earlier announced pipeline project via Bulgaria would be cancelled.
President Vladimir Putin said that Russia needed to take the opportunity to diversify its economy to protect it from external shocks.
Verdi said in a statement that workers at four of those centres had decided to continue their strike until Saturday and employees at the Graben warehouse would strike until Dec. 24.
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