IMF: Blame Europe for Longer Recession
EU policy blunders likely to result in longer slowdown for rest of world
By Rob Quinn,  Newser Staff
Posted Apr 23, 2009 5:41 AM CDT
Construction worker Antonio Montoya, 54, stands in line at the employment office in Almeria, southern Spain.   (AP Photo/Sergio Torres)
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(Newser) – The European economy will sink deepest out of all global economies, bounce back slowest—and delay recovery for the rest of the world to boot, according to the IMF's latest forecast. The agency predicts the EU's economy—at $18 trillion, nearly a third of the world's total—will shrink 4% this year and contribute to a longer slowdown in the US and Asia, reports the Wall Street Journal.

The bleak prediction is likely to come as a blow to many of the EU's 27 governments, whose leaders have blamed slowdowns at home on the US. The IMF, however, says that more than half of European banks losses are homemade. Some analysts say Europe's less aggressive stimulus measures are to blame, and note that having 27 different sets of banking regulations will make it tough for Europe to take unified action to fix its banking system and boost lending.