New York City -
The International Monetary Fund, IMF, warned that the global economy is at risk of slipping back into a recession if the U.S. does not take significant steps to bolster its weak recovery and Europe does not take strong action to prop up its failing banks and sovereign debt problems within each country.
This comes just as France and Italy recently had their credit rating downgraded, Siemens pulled $500 million out of French Banks over worries the banks will collapse due to their high exposure to Greek debt which is itself undergoing another round of deep austerity cuts in order to get access to another $11 billion of the $110 billion in emergency funds set aside by the European Central Bank, ECB, and fellow european monetary partners in an effort to keep Greece from defaulting.
And it keeps going, the IMF warned that a plan was urgently needed to restructure and reduce Japan's public debt, and that faltering 3rd world countries are likely to default if the industrialized nations go back into another recession.
However, many analysts say that while this recession scenario is true, and the painful steps of spending and cutting to prop up the economies is needed, the pain of it would be short lived once the global economy finally rebounds; and with a rebound, they say, nations and people will be flush with cash that they are able to use to pay down long term debt and continue forward and growing.