Gordhan: Economies sliding on EU crisis

2011-12-02 10:27

Johannesburg - World economies are sliding as a result of eurozone debt problems and failure by European leaders to make the right decisions to resolve the crisis will have massive consequences for the global outlook, said Finance Minister Pravin Gordhan.

Gordhan reiterated during a debate recorded for the BBC World Service's Business Daily programme that the rapid flow of capital in and out of emerging markets as investors fretted over the crisis was having major disruptive effects on their economies and currencies.

"What we are now having is the sinking developed world which is pulling the rest of the world down, rather than managing the situation," Gordhan said.

"So all of our economies are now sliding, whether we are in China, in Brazil, in India or wherever we might be, and that is going to have massive consequences in terms of the overall global outlook."

On Wednesday Gordhan told a media briefing that South Africa hoped Europe, its largest trading partner, would increase its bailout fund and reassure global markets about resolving the debt crisis.

South Africa has cut its 2011 growth forecast to 3.1% from 3.4%, partly due to the crisis.

"European leaders... don't seem to have the political capacity to both manage their own backyards on the one hand, and ensure that they don't damage the rest of the world on the other hand," Gordhan said during the BBC debate to be aired on Friday.

He urged that individual countries' interests should take a back seat to mutual global interests in discussions over the crisis.

"Otherwise we are forsaking all the wonderful opportunities we have to put billions of people on a better footing in terms of their lives and create a situation where we have a really depressing decade ahead of us," said Gordhan.

  • 100000615900114 - 2011-12-02 11:29

    ...failure by European leaders to make the right decisions, now Gordhan seeing that you are so clever, What is the right decisions.

  • 100003155604697 - 2011-12-02 11:32

    Says the maaifoedie who wastes our money staying in R30000 a night hotels.

  • gcr - 2011-12-02 11:38

    Why is Pravin concern he has all the excuses in his favour as to why they can't achieve a growth rate greater than 2.7% and why they won't be able to create 5 mill jobs by 2020. This just shows how ineffective smoke and mirrors side shows really are. Sincerely hope this brings about the demise of the ANC as a government

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