Fiscal Policy Exhaustion and Sovereign Risk Slowing Down the Global Recovery

Fiscal Policy Exhaustion and Sovereign Risk Slow Down Global Recovery By Evangelos Otto Simos INTERNATIONAL ECONOMIC OUTLOOK Dr. Simos is Director of Forecasting at e forecasting.com, a division of Infometrica s Data Center, 65 Newmarket Road, Durham, NH 03824, U.S.A., www.infometrica.com, eosimos@e-forecasting.com. This report does not purport to be a complete description of global economic conditions and financial markets. Neither the Journal nor Infometrica, Inc. guarantee the accuracy of the projections, nor do they warrant in any way that the use of information or data appearing here in will enhance operational or investment performance of individuals or companies who use it. The views presented here are those of the author, and in no way represent the views, analysis, or models of Infometrica, Inc. and any organization that the author may be associated with. I. Global Assessment and Outlook T T wo of the sixteen members of the Euro Area—the European Union’s bloc using the euro as its common currency—have been rescued. Greece received a bailout of 110 billion euros and Ireland’s bailout hit 85 billion euros. Financial pressures from debt burdens and rising borrowing ...