World Bank director warns on eurozone

World Bank director warns on eurozone

WASHINGTON - Agence France-Presse
World Bank director warns on eurozone

New World Bank Director Jim Yong Kim says that the eurozone financial crisis poses a deep risk for the globe and that the EU needs to act to restore stability. REUTERS photo

New World Director Jim Yong Kim warned July 1 that the eurozone financial crisis poses a deep risk for the global economy and said it was urgent that European countries act to restore stability.

In a statement marking his first day on the job, Kim said the world’s economy “remains highly vulnerable.” The World Bank has “an economic and moral imperative to help address risks to global growth, no matter where they emerge,” he said.

“A strong global economy benefits all countries; a weak global economy makes all countries vulnerable.
“It is urgent that European countries take all necessary measures to restore stability because their actions will impact growth in all regions of the world.

Kim, a physician and global health specialist who was chosen over two respected economists for the position, said his immediate priority leading the global lender would be “to help developing countries maintain progress against poverty in these volatile times.” “I will work with our clients and partners to ensure that we are creating a new economic firewall: one that protects people in developing countries against shocks.” “I know from my work in poor communities around the world that, when a crisis hits, and no safety net is in place, the effects can be devastating.” His focus on threats spilling out of the eurozone echoed his predecessor, Robert Zoellick, who repeatedly in recent months stressed the danger posed by the euro crisis and indecisiveness by European leaders to the rest of the world.
“We’re waiting for Europe to tell us what it is going to do,” Zoellick said during the Group of 20 summit in Los Cabos, Mexico, in mid-June, which was focused on getting concrete action in Europe.

“Markets can manage risks that they’re well aware of. The danger we’re creating is that the pattern of policy making is increasing uncertainty and making markets more nervous, which has a negative feedback,” he warned.