Global recovery has stalled and confidence in policy makers is waning

As the decisive elections in Greece conclude and the G20 summit in Los Cabos begins, world leaders must refocus their attention on the ailing economy.

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As the decisive elections in Greece conclude and the G20 summit begins, world leaders must refocus their attention on the ailing economy as new research shows global recovery has stalled again.

As Graph 1 shows, the latest FT/Brookings Institution Tiger index of world economic conditions also reveals confidence in policy makers to boost the economy has also taken a nose dive.

Graph 1:

FT-overall-growth-index
The FT reports:

The FT/Brookings Tiger index showed world growth stalling after an initial rapid recovery from the 2008-09 economic crisis. Growth in the US was slowing, much of Europe is in recession, China’s growth outlook has weakened, the reform processes in India have stalled and other large emerging economies have slowed dramatically.

As leaders of the most powerful economies gather on Monday in the Mexican beach resort of Los Cabos, expectations are low that the G20, billed as the world’s “premier economic forum”, will offer co-ordinated action rather than hot air.

European leaders are nervous that the summit will follow the same script as the Cannes G20 last November, which broke up without any material progress, showing world leaders, and Europe in particular, to be impotent in the face of market and economic storms.

In the run up to the Greek elections, polls suggested radical anti-austerity party Syriza would gain the majority of the votes, sparking fears Greece would subsequently refuse to follow the terms of their bailout and possibly be forced to leave the single currency. However, it seems fear of leaving the euro outweighed any attraction the Greek people had towards the charismatic Syriza leader Alexis Tsipras as pro-bailout party New Democracy gained the majority of votes yesterday.

Antonis Samaras, leader of the New Democracy party who won the election with 29.7% of the vote, will today try to forge a coalition government. Due to a rule in Greece that grants the successful party 50 extra seats, New Democracy holds 129 seats, Syriza have 71 (26.9% of the vote) and socialist party Pasok have 33 (12.3%). Extreme right party Golden Dawn, a representative of which made headlines recently after attacking a female politician live on television, retained their minority with 18 out of the 300 seats.

 


See also:

Developed world voters: ‘Austerity is failing, the banks have too much power’ 12 Jun 2012

Eurobonds are about solidarity, which is not Cameron’s strong point 8 Jun 2012

Prepare for “no austerity without growth” 6 Jun 2012


 

World leaders may have breathed a collective sigh of relief following the success of Greece’s pro-bailout party yesterday, but they should now expect further pressure to ensure the security of the single currency and to implement a successful route to economic recovery.

 


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12 Responses to “Global recovery has stalled and confidence in policy makers is waning”

  1. NewsatLeft

    Global recovery has stalled and confidence in policy… //t.co/qejp6hBM #SustainableEconomy #eurocrisis #G20 #Greece #NewDemocracy

  2. Political Planet

    Global recovery has stalled and confidence in policy makers is waning: As the decisive elections in Greece concl… //t.co/SygbHqVN

  3. Alex Braithwaite

    RT @leftfootfwd: Global recovery has stalled and confidence in policy makers is waning //t.co/FKXGIxFN

  4. Pulp Ark

    Global recovery has stalled and confidence in… //t.co/24tuPXIK #SustainableEconomy #eurocrisis #G20 #Greece #muslim #tcot #sioa

  5. leftlinks

    Left Foot Forward – Global recovery has stalled and confidence in policy makers is waning //t.co/RXlZ7tkM

  6. Martin Steel

    Global recovery has stalled and confidence in policy makers is waning, writes @LFFKatie: //t.co/1OXmHluI #Greece #euro

  7. Michael

    Global recovery has stalled and confidence in policy makers is waning I Katie Stanton – //t.co/PXxSaaO9

  8. Katie Stanton

    Global economic recovery has stalled (with graph! I love graphs!) //t.co/fI7P9mrH

  9. Lord Blagger

    1. How can 3% (based on Greek GDP) take out the Euro? It’s so wobbly that its a disastrous policy.

    2. Austerity, Greece, the other PIIGS, are just exhibiting symptoms of the underlying disease. That disease is debt, and in particular debt that is hidden. The buy now, pay latter, with cheap easy payments to start escalating later.

    That’s the illness. The crime that’s going on. The rest is just the symptom of the underlying malaise.

    So if you’ve lent governments money, then you are going to be screwed. So since the entire civil service pensions have effectively been lent, they are the ones with most to lose.

  10. BevR

    RT @leftfootfwd: Global recovery has stalled and confidence in policy makers is waning //t.co/dlORjcM5

  11. Brian Tomkinson

    RT @leftfootfwd: Global recovery has stalled and confidence in policy makers is waning //t.co/dlORjcM5

  12. Anonymous

    That’s right, the debt caused by the robbery of capital being funneled away from wages. Of course you’re protecting that at the expense of pensions.

    And it’s that wobbly because of constant attacks like yours.

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