Skip to main content

OECD: U.S. will recover faster, Europe faces unemployment crisis

May 29, 2013 -- Updated 1323 GMT (2123 HKT)
Pier Carlo Padoan, deputy secretary-general and chief economist, said the European Central Bank could investigate more non-conventional ways to promote growth.
Pier Carlo Padoan, deputy secretary-general and chief economist, said the European Central Bank could investigate more non-conventional ways to promote growth.
STORY HIGHLIGHTS
  • Growth in advanced economies should "strengthen gradually" from the middle of this year through to 2014
  • Greece, the first country to receive a bailout more than three years ago, is now in its sixth year of recession.
  • The OECD used the outlook to call for faster movement toward a full-fledged eurozone banking union

Editor's note: CNN's Irene Chapple is reporting from the Organisation for Economic Cooperation and Development (OECD) Council meeting in Paris. Follow her on Twitter.

(CNN) -- The global recovery is emerging, but it has two speeds: That of the stimulus-fed U.S. and that of the austerity-starved eurozone, according to a new report.

The Economic Outlook from the Organisation for Economic Cooperation and Development, released Wednesday, paints a picture of pain for some economies as major nations struggle to emerge from recession and unemployment in Europe soars to record levels.

Read more: Portugal economy minister: 'We are suffering but will persevere'

The survey gives some ammunition to stimulus supporters with its projections showing the U.S. is emerging from the financial mire better than Europe, which is facing a new crisis of extreme youth unemployment.

Growth in advanced economies should "strengthen gradually" from the middle of this year through to 2014, the report found.

Read more: OECD: End nears for Japan's deflationary spiral

However, the upturn "continues to diverge across countries, with the U.S. likely to grow faster than other large OECD economies."

Euro area growth, the report continued, "remains constrained by the lingering effects of the euro area crisis, the ongoing drag from fiscal consolidation and weaknesses in credit markets."

The OECD used the outlook to call for bolder measures solve the crisis and faster movement toward a full-fledged banking union.

Read more: Survey: Australia the 'lucky country' for a better life

Writing in the report, Pier Carlo Padoan, deputy secretary-general and chief economist, said the European Central Bank could investigate more non-conventional ways to promote growth and the euro area needed to continue repairing deputy its banking system.

Watch more: OECD's video on economic outlook

"As euro area policy has often been behind the curve, perceptions of strong disagreement among members states could have negative consequences on confidence and exacerbate fragmentation," he wrote.

Greece, the first country to receive a European Union bailout more than three years ago, is now in its sixth year of recession.

Meanwhile, its youth unemployment levels have shot over 60%, according to Eurostat's lastest figures.

Stimulus or austerity? Share your views and experiences

The report found labor markets would firm in the U.S. and Japan but unemployment would continue to rise in the euro area through 2014.

The report warned: "Structural reforms are essential to prevent cyclical unemployment from becoming structural."

The OECD said U.S. annual GDP growth will be 2.8% in 2014, up from 1.9% in 2013. The euro area will contract by 0.6% in 2013 before growing by 1.1% in 2014.

In total, the OECD countries will have GDP growth of 1.2% in 2013 rising to 2.3% in 2014.

Euro area unemployment is predicted to peak at 12.3% in 2014, from 12.1% in 2013.

ADVERTISEMENT
Part of complete coverage on
August 27, 2013 -- Updated 1943 GMT (0343 HKT)
German Finance Minister Wolfgang Schaeuble says the eurozone's problems are not solved, but "we are in a much better shape than we used to be some years ago."
September 4, 2013 -- Updated 1528 GMT (2328 HKT)
The G20 is held in Russia but, amid disagreements over Syria, can anything be done? John Defterios investigates.
July 10, 2013 -- Updated 1502 GMT (2302 HKT)
Summer could not have come soon enough for Lloret de Mar, a tourist resort north of Barcelona. Despite the country's troubles, it's partying.
June 7, 2013 -- Updated 1750 GMT (0150 HKT)
The euro club has suffered major shockwaves but its newest member has emerged as an economic star. What;s behind Estonia's success?
May 29, 2013 -- Updated 1323 GMT (2123 HKT)
The global recovery has two speeds: That of the stimulus-fed U.S. and that of the austerity-starved eurozone, according to a new report.
May 14, 2013 -- Updated 1326 GMT (2126 HKT)
The flags of the countries which make up the European Union, outside the European Parliament in Strasbourg, France.
The "rich man's club" of Europe faces economic decay as it struggles to absorb Europe's "poor people", according to economic experts.
May 27, 2013 -- Updated 0256 GMT (1056 HKT)
Europe's competitiveness is threatened as manufacturing companies scrambling to find enough skilled engineers.
July 10, 2013 -- Updated 1502 GMT (2302 HKT)
Spain's economic crisis is in its sixth straight year yet tourism, worth 11% of GDP, is holding its own, one of the few bright spots on a bleak horizon.
May 2, 2013 -- Updated 1044 GMT (1844 HKT)
As European financial markets close for the spring celebration of May Day, protesters across Europe and beyond have taken to the streets to demonstrate.
April 26, 2013 -- Updated 1210 GMT (2010 HKT)
As Croatia prepares to enter the 27-nation European Union, the country's Prime Minister says Italy must return to being the "powerhouse of Europe."
April 25, 2013 -- Updated 1656 GMT (0056 HKT)
Spain's unemployment rate rose to a record high of 27.2% in the first quarter of 2013, the Spanish National Institute of Statistics said Thursday.
March 25, 2013 -- Updated 1355 GMT (2155 HKT)
The financial uncertainty in Cyprus is generating images of long lines at ATM machines and anti-European Union protests.
March 25, 2013 -- Updated 1815 GMT (0215 HKT)
Cyprus will "step up efforts in areas of fiscal consolidation." Where have we heard that before? Oh yes. Greece.
March 23, 2013 -- Updated 0139 GMT (0939 HKT)
The Cyprus debt crisis is being felt by the banks but also by the people who work at them. Nick Paton Walsh reports.
March 22, 2013 -- Updated 0010 GMT (0810 HKT)
CNN's Nick Paton Walsh reports on a Russian hotel maid caught up in Cyprus' financial crisis.
March 18, 2013 -- Updated 1608 GMT (0008 HKT)
Never underestimate the capacity of the Eurozone to shoot itself in both feet, says CNN's Richard Quest.
February 21, 2013 -- Updated 1603 GMT (0003 HKT)
Spain has seen hundreds of protests since the "Indignados" movement erupted in 2011, marches and sit-ins are now common sights in the capital.
ADVERTISEMENT