A United Nations report says the weak U.S. economy is no shape to lead the global economy out of the doldrums. Europe is in a better position to become the engine of worldwide economic growth.
The U.N. report says earlier forecasts that an economic recovery will start in the second half of next year probably will not prove true. The major reason for this, according to the U.N. economists, is the staggering economic costs to the United States of the September 11 attacks, estimated at $200 billion, or two percent of the U.S. Gross Domestic Product.
Senior U.N. economist Dieter Hesse says the situation in the United States has increased the risks of global recession.
"The prospects for immediate recovery in the United States are rather bleak because the prospects for consumption and business investment are really uncertain," says Mr. Hesse. " And we do not think that there is any kind of prospect for a very rapid or significant rebound of economic activity in the United States in the course of 2002."
The report says, with the United States unable to lead the global economy, Western Europe could become the engine for renewed growth.
Paolo Garonna is executive secretary of the U.N. Economic Commission for Europe. He says the economic fundamentals in Europe are better than in the United States. But he says it is not clear that European policymakers have the vision needed to improve global growth.
"Who is going to replace the role of the U.S. or accompany the U.S. in this role? We think that Europe can and should take this kind of leadership role," he says. "Europe can be the locomotive provided it takes a more courageous policy stance, not only in terms of monetary policy, but particularly in terms of inflationary and fiscal policies."
Mr. Garonna says sustained growth in the rest of the world, especially in Western Europe, would create the best environment for a smoother adjustment in the United States. He says Western Europe needs to face the fact that the strengthening of the global economy cannot be left to the United States alone.