The economic outlook for developed economies is worse than expected, says the OECD in its latest look at European prospects.
The OECD estimates a 2012 growth of 1.4% for the G7 as whole, but across the group forecasts diverged widely.
OECD Chief Economist, Pier Carlo Padoan, says that the eurozone is the growing epicenter of the global economic slowdown. And any breakup of the bloc might be disastrous:
“Increasingly on the public debate for some time now [is that] some countries may be forced to exit the euro area. These risks are pushing up yields, which, in turn, make the situation worse and possibly reinforce the fears of [a] breakup. So we consider exit from the euro area a very negative possibility, which I personally think will not be limited to any single country [and] would spur a chain reaction. Political contagion in the euro area [could become] unmanageable.”