Robert Zoellick: ‘Far from clear leaders ready for impending catastrophe’
‘Beware a rerun of the Great Panic of 2008’: Head of World Bank warns Europe is heading for ‘danger zone’ as world markets suffer bleakest day of the year so far
Robert Zoellick: ‘Far from clear leaders ready for impending catastrophe’
Raft of dismal news from around world wreaked havoc on market
Manufacturing output crashed in Britain, jobless up in Europe and U.S.
Fast-emerging economies such as Brazil and China running out of steam
By Hugo Duncan
DailyMail.com
1 June 2012
The head of the World Bank yesterday warned that financial markets face a rerun of the Great Panic of 2008.
On the bleakest day for the global economy this year, Robert Zoellick said crisis-torn Europe was heading for the ‘danger zone’.
Mr Zoellick, who stands down at the end of the month after five years in charge of the watchdog, said it was ‘far from clear that eurozone leaders have steeled themselves’ for the looming catastrophe amid fears of a Greek exit from the single currency and meltdown in Spain.
The flow of money into so-called ‘safe havens’ such as UK, German and US government debt turned into a stampede yesterday.
In Berlin the two-year government bond yield fell below zero for the first time, with the bizarre result that jittery international investors are now paying – rather than being paid – for lending to Germany.
There was a raft of dismal economic news from around the world, with manufacturing output falling in Britain and Europe, unemployment jumping in the eurozone and America, and fast-emerging economies such as Brazil and China showing signs of running out of steam.
The FTSE 100 index fell 60.67 points to a new 2012 low of 5260.19 in London and the pound tumbled against the US dollar to $1.5234 – a level not seen since January.
The Dow Jones Industrial Average shed more than 200 points in New York, wiping out all its gains this year.
Borrowing costs in Spain and Italy have soared back above 6 per cent towards the 7 per cent level that triggered bailouts in Greece, Ireland and Portugal.
Mr Zoellick warned that the coming months could be as bad as the collapse of US investment bank Lehman Brothers in 2008.
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