Davos warns on global economic crisis
SWITZERLAND: The world's political and business elite headed home
Sunday from this year's Davos forum with warnings that while the worst
of the financial crisis seems over there is still much to be done.
International Monetary Fund chief Christine Lagarde said in the closing
moments of the annual gathering in the snowy Swiss ski resort on
Saturday that she recommended the “do not relax principle” for the
coming year.
Where for the two previous years a sense of crisis had hung over the
World Economic Forum, the mood was sunnier at the 2013 edition as
speaker after speaker said they were now cautiously optimistic.
“I feel the circumstances in which I'm addressing you today are very
different than 12 months ago,” said Italian Prime Minister Mario Monti
in his opening speech, following a torrid year dominated by the euro
crisis.
European central banker Mario Draghi meanwhile hailed 2012 as the
year that the troubled single currency was “relaunched”, even as others
were hailing him as the man who had saved the eurozone from catastrophe.
The Chinese economy's slowdown seemed less serious than a year ago to
the participants while the step back from the fiscal cliff in the United
States also eased minds.
But as the 2,500 world leaders, financial officials, tycoons and
journalists departed the picture-postcard Alpine resort, they may have
felt a chill that was not just down to the subzero temperatures.
Lagarde said the IMF's forecast of a “very fragile and timid recovery
for 2013” was based on “eurozone leaders, the US authorities on the
other hand and the Japanese authorities making the right decisions.” She
added: “And that's what I mean by 'do not relax' because some good
policy decisions have been made in various parts of the world. In 2013,
they have to keep the momentum.” The head of the Organisation for
Economic Cooperation and Development (OECD), Angel Gurria, warned
meanwhile that countries had exhausted most room for manoeuvre in terms
of fiscal and monetary policy. “We should be very worried because the
lack of room for some of the more traditional tools has gone and we are
left with very few of these tools,” he said.
As in previous years the Davos forum was partly hijacked by external
events, particularly after British Prime Minister David Cameron vowed to
hold a referendum on European Union membership by the end of 2017.
The move threatened to cause a stir, with Cameron's European
counterparts worried about the effect the uncertainty would have on the
euro's already fragile recovery, but they left any rows for another day.
The turmoil in the Arab world also took centre stage for a time as
officials including Jordan's King Abdullah II urged “desperately needed”
action over Syria's civil war, though none came.
Amid the cocktail parties and lavish luncheons at Davos this year
there was sometimes a “mood of complacency”, said Axel Weber, the
chairman of Swiss bank UBS and former head of Germany's Bundesbank.
AFP |
