Problems pile up for post-crisis world
By Jonathan Lynn and Ben Hirschler
GENEVA/LONDON (Reuters) - The world economy is back from the brink after a mammoth $5 trillion in fiscal and monetary stimulus but the list of things for the rich and powerful to worry about in Davos next week is longer than ever.
Perhaps the biggest unknown for 2010 is how smoothly the world's central banks can withdraw the monetary crutch that buoyed markets in 2009.
Beyond that, the worsening finances of both governments and individuals raises the specter of sovereign debt defaults and may also mean the next leg of the crisis is social, Klaus Schwab, executive chairman of the World Economic Forum that organizes the Davos gathering, said on Wednesday.
"As a consequence of the debt situation of governments, of the fiscal situation of governments, we will have certainly squeezed public and private households and we will have increased unemployment figures," Schwab told a news conference.
Greece's ballooning debt has loomed largest for financial markets in recent weeks but other European countries are also deeply in the red and ratings agencies have warned that the credit of even the United States is not invulnerable in the longer-term.
World leaders and policymakers will gather in record numbers for the annual Davos forum from January 27 to 31, although top Wall Street bankers will be thin on the ground.
Many U.S. bankers are shunning the event for the second successive year in a sign they remain wary of being seen at the Swiss ski resort at a time when they are still being criticized for their role in the financial crisis and over massive bonuses that are being paid out to their staff.
PATIENCE RUNNING OUT Continued...