The Paris-based Organisation for Economic Co-operation and Development said the 17-nation single currency area was on course to contract by 0.1% this year – with deep contraction in the countries of southern Europe – but said a worsening of the debt crisis could result in output falling by as much as 2%.
The OECD, which has 34 rich-country members, said it expected Greece to contract by 5.3%, Portugal by 3.2%, Spain by 1.6% and Italy by 0.9%.
With developing countries such as China still growing strongly, the thinktank said global growth this year would be 3.4%, down from 3.6% in 2011, before rising to 4.2% in 2013. But growth among OECD members would be held back by Europe and would ease from 1.8% to 1.6% in 2012 before recovering to 2.2% in 2013. Of the big rich nations, the US and Japan would grow most strongly, while Britain is expected to grow by just 0.5% this year, accelerating to 1.9% in 2013.
In contrast to the eurozone, the US was expected to continue to benefit from easy credit conditions and ultra-loose monetary policy, with the world's biggest economy forecast to grow 2.4% this year and 2.6% in 2013.
Japan's 2% growth this year would be boosted by a construction boom after the tsunami in 2011, while China would expand by 8.2% in 2012 and 9.3% in 2013.
To produce income for oneself and one’s family, to plan ahead and budget, to borrow only when it makes sense to do so (but not in order to consume beyond one’s current or near-future means), and to save some income, are all acts that are rational, selfish, and thus moral. None of them is an ascetic act of self-sacrifice performed from duty or a hatred for one’s life, self, health or wealth. The result of producing, saving, and investing is not the miser’s life nor the cartoonish life of Mr. Scrooge but the life of earned success, supreme comfort, and guilt-free happiness. “Austerity” seems much too harsh a name for this kind of wonderful life.
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