IMF: Continued Austerity In Europe Will Lead To Unrest

IMF: Austerity in EU Risks Becoming Politically, Socially Untenable -- Wall Street Journal

WASHINGTON--Budget-tightening in ailing euro countries is at serious risk of becoming politically and socially untenable, one of the major liabilities threatening another round of recessions around the globe, the International Monetary Fund told world financial leaders.

Uncertainty over how governments in the U.S. and Europe will handle their mounting economic crises is rapidly increasing the risk of global growth falling next year to below 2%, the IMF said in a report to the Group of 20 largest industrialized and developing economies this week. That compares with a current growth projection of 3.6% for 2013, and translates into recessions in advanced economies and a serious slowdown in emerging markets such as Brazil, India and China.

Earlier this year, the IMF estimated there was around a 4% probability of global growth falling to such sub-2% levels. Now, the IMF said that probability is closer to 20%.

Read more ....

Update #1: IMF warns of political limits to austerity -- The Australian
Update #2: IMF and EU face tough choices on Greece debt -- Reuters

My Comment: The EU is critical of the IMF's report .... and of course austerity makes those dependent on government assistance desperate .... but the bottom line is that there is no more money to give to those EU nations who have spent themselves to these ridiculous and unsustainable spending and debt levels .... and the lenders (understandably) want guarantees for good behavior before another euro is dished out. My advice to the lenders .... do not wait too long.