Not “recession” but “restructuring”. In Europe. Germany and Europe must address the debt crisis, he says.
Zoellick says that some fear restructuring of sovereign debts could set off contagion, making it harder for other countries to rill-over debts. Contagion concerns are serious but lack of confidence in debtors could lead investors to back away for good. Zoellick says. If a country cannot repay its debts, a managed restructuring and financial support can revive confidence, he concludes.
It is interesting to hear the World Bank talk restructuring while its cousin, the IMF, frantically tries to shore up Europe so that restructurings are not necessary. No wonder investors continue to shun the euro.
EUR/USD is easing, now at 1.2025.
