Eurozone Teetering on Economic Cliff

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The 17-country eurozone risks falling into a "severe recession," the Organization for Economic Cooperation and Development is warning.

On Tuesday, the organization called on governments and Europe's central bank to act quickly to keep the slowdown from dragging down the global economy.

OECD Chief Economist Pier Carlo Padoan said the eurozone economy could contract as much as 2 percent this year, a figure that the Paris-based think tank had laid out as its worst-case scenario in November.

Kereakos Zuras, former adviser to President George W. Bush, talked more about the Europe's debt crisis on the CBN News Channel's Morning News, May 23.

In its twice-yearly global economic outlook, the OECD - which comprises the world's most developed economies - said its average forecast was for the eurozone economy to shrink 0.1 percent this year and grow a mere 0.9 percent in 2013.

"Today we see the situation in the euro area close to the possible downside scenario," the OECD said.

If that materializes, "it could lead to a severe recession in the euro area and with spillovers in the rest of the world," Padoan told reporters.

The report forecasts Europe falling further behind other countries, particularly the United States, whose economy is expected to grow 2.4 percent and 2.6 percent, respectively.

"There is now a diverging trend between the euro area and the U.S., where the U.S. is picking up more strongly while the euro area is lagging behind," Padoan said.

Europe itself is increasingly split between a wealthier north continuing to grow and a southern rim that is sliding deeper into recession, the OECD figures show.

Despite their growth downgrades for Europe, the OECD's figures are more optimistic than those of the International Monetary Fund.

Last month the IMF predicted Europe's economy would shrink 0.3 percent this year, with the U.S. expanding 2.1 percent.

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