Short-term fix no solution to euro problems says World Bank

The world’s leading economies have relied on short-term measures to get them through the financial crisis and must now make deeper reforms to speed up growth and ease debt problems in many rich countries, the World Bank said.

The World Bank called for “enhanced G20 focus” on policies to reinvigorate growth, in a report for the Group of 20 leaders who meet for an annual two-day summit today against the backdrop of Europe’s debt and political crisis.

The report also urged “forceful” actions to prevent the eurozone debt crisis from spilling over into the rest of the world.

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World Bank chief Robert Zoellick said the eurozone countries had to come up with a plan quickly to overhaul the single currency area.

“It’s no longer so much about which model the Europeans choose. They should just decide on one. Quickly,” Mr Zoellick told Germany’s Der Spiegel magazine.

Slowing growth in emerging economies was “worrisome”, the World Bank said.

Economic growth of above 6 per cent in most developing regions has been a vital source of strength for the world economy since the financial crisis erupted in 2008.

“G20 policy actions since the onset of the global financial crisis have had a dominant focus on short-term crisis response,” the World Bank said in a statement.

“Such measures are of course the first order of business in a crisis, and much remains to be done on fiscal and financial fronts to restore stability.”

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