Monday, May 22, 2006

OECD warns on global imbalances


The Organisation for Economic Cooperation and Development (OECD) has warned that the global imbalances in world trade are unsustainable and must be tackled.
Opening the global think tank's annual forum, Greek finance minister George Alogoskoufis said the situation posed major risks to global economic stability.

He told reporters that although it was too early to talk of a "crisis" in the markets, recent falls in global stock and currency markets could be the beginning of a "correction" based on uncertainty about the future direction of interest rates.

And in a barely veiled criticism of the United States he called for greater international economic policy coordination to prevent large countries abusing their position and practicing "beggar-my-neighbour policies".

Policy coordination, particularly on currencies, was "looser" than it had been in the past, he said.

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