OECD Sees Risk of Europe Crisis Hurting World Economy

The Organization for Economic Cooperation and Development said Europe’s debt crisis risks spiraling and seriously damaging the world economy.

“The risk is increasing of a vicious circle, involving high and rising sovereign indebtedness, weak banking systems, excessive fiscal consolidation and lower growth,” OECD Chief Economist Pier Carlo Padoan wrote in the organization’s semi-annual report on the global economy. Such a downside scenario “may materialize and spill over outside the euro area with very serious consequences for the global economy,” he said.