Austerity Cuts Will Not Spark Recession

LONDON, July 21, 2010 - In spite of massive austerity cuts, Europe is likely to avoid a double
dip recession, says the Economist Intelligence Unit.

In an interview with financial broadcaster www.cantos.com,
Director of Global Forecasting Robert Ward says the EIU's forecast for the
global economy remains one of slow growth with a slowdown in that growth for
the second half of 2010.

Despite the positives expected from structural reforms he warns of two
"danger points" - stress tests to be announced by European banks and
stabilization mechanisms designed to bail out the euro.

"Now if neither of these really gains traction in terms of convincing the
markets that they're able to backstop everything, then you could get another
round of volatility which would of course be bad for consumer sentiment
again, bad for banks, particularly if counterparty risk remains elevated and
this would then feed back in a negative feedback loop into the broader
economies which are now facing austerity. So there are some issues there to
be worried about."

The video interview and transcript are available now on
www.cantos.com/eiu.

Cantos.com, the online financial broadcaster, features in-depth
interviews, documentaries and webcasts with economists, analysts and senior
company executives. If you would like to contact us, please email
amanda.alexander@cantos.com or phone 44(0)207-936-1352.

Cantos.com, the online financial broadcaster, features in-depth
interviews, documentaries and webcasts with economists, analysts and senior
company executives. If you would like to contact us, please email
amanda.alexander at cantos.com or phone 44(0)207-936-1352.