Market and the media 'obsessive' on Greece

Euro Zone: The machinations of the European financial elite are of secondary importance in the big global picture, says Jim O'Neill.

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Jim O'Neill was speaking in Dubai on the day the European Central Bank unveiled its €500 billion (Dh2.42 trillion) "bazooka" to help to resolve the euro-zone crisis.

But he believes that the machinations of the European financial elite are of secondary importance in the big global picture.

"Europe is still not the world," he said, describing the problems of the Greek economy as a "never-ending nonsense".

"Market participants and media have some sort of obsessive mindset about Greece," he said. "The euro zone will go up and down, as will the euro. However, people shouldn't exaggerate its importance.

"In 2012, the combined GDP of the Bric countries will increase by US$2tn [Dh7.34tn] - close to creating another economy the size of Italy.

"China creates the equivalent of another Greece every 12 weeks or so. This decade, the countries we have identified as growth economies- the Bric countries plus Mexico, South Korea, Turkey and Indonesia - will add $15tn-$16tn to global GDP, more than double that of the USA and Europe combined," he estimated.

But Mr O'Neill recognised that the euro-zone authorities have taken positive action over the past couple of months to defuse the crisis. "What is key is that the ECB [European Central Bank] and other policymakers protect the downside risks from getting worse, and they have done this so far.

"Then it becomes an overhyped story."

Does he believe the notion that it is up to the fast-growing economies of Asia to pull the developed world out its economic problems?

"Asia and the other growth-market economies will contribute to global growth, and continuing on this growth trajectory is what the Bric countries can do to help the world," he said. "In the developed world, Germany is the model for the rest of them. It has the lowest unemployment for 20 years and it already exports more to the Bric countries than it does to France," he added.

* Frank Kane

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