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IMF: The Eurozone Will Slide Back Into Recession 'If Nothing Is Done'


Worries about the eurozone stagnating were at the forefront as the annual IMF-World Bank meetings on the global economy kicked off.

Despite the general recovery from the financial crisis that began six years ago, red flags were out for a number of dangers -- the West African Ebola epidemic, the Ukraine crisis, the conflict in the Middle East, and the potential global whiplash from the coming policy tightening by the US Federal Reserve.

IMF Managing Director Christine Lagarde pointedly warned that the eurozone could fall back into recession if action is not taken to prevent it.

"We are not suggesting that the zone is heading toward recession, but we are saying that there is a serious risk that that happens if nothing is done," she said.

Lagarde said that the IMF puts the chance of the euro area slipping back to a prolonged contraction at 35-40 percent -- "not insignificant," she added.

"If the right policies are decided, if both surplus and deficit countries do what they have to do, it is avoidable."

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