World Bank Head Warns of Dangerous Times Ahead

World Bank president Robert Zoellick is pictured here during visit to Bulgaria in August last year. Photo by Sofia Photo Agency

The World Bank President Robert Zoellick has voiced serious concerns over Europe's future, arguing that its economic problems are far more serious than those in the US.

"In the past couple of weeks the world has moved from a troubled multi-speed recovery - with emerging markets and a few economies like Australia having good growth, and developed markets struggling - to a new and more dangerous phase," Zoellick said in an interview for The Weekend Australian.

He called on European leaders to approach their continent's sovereign debt malaise with a greater sense of urgency, and criticized the structures of the European Union that hampered implementing effective economic reforms.

"It's not the same as 2008 (when the previous global financial crisis hit)," he said.

"On the positive side, people have paid down debt and there is not the same sudden shock as in 2009. But, on the other hand, most developed countries have used up fiscal space and monetary policy is about as loose as it can be."

According to Zoellick fast-growing developing nations such as China, India, Brazil and Southeast Asia are growing stronger and more powerful due to a "redesigning" of the international financial system.

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