|WORLD BANK BOSS: EMERGING MARKETS AT RISK|
Oranjestad, 27 January, 2011 -- World Bank President Robert Zoellick has warned that the eurozone crisis could have a dire effect on emerging markets if it continues in 2012. Zoellick discussed the World Bank's assessment that the coming year could be as bad for emerging markets as 2008 if the eurozone crisis worsened.
"If there's a more serious breakdown in the eurozone... then developing countries have to be prepared," he said. "They have to pre-fund some of their own bonds, they have to look at the trade side, they have to look at the banking side.”
The World Bank is trying to shield emerging markets by making $27 billion available over next two years, specifically in central and eastern Europe.
While each emerging market would weather the crisis differently, he said, "the closer you are to Europe, the more you're going to be at risk."
He said the issues underlying Europe's crisis were yet be resolved. "Europe has sort of stumbled up to each crisis, put together a package, managed to get through the crisis, and it's bought time but it hasn't fundamentally addressed the problem. It's really now in my view a question of Italy and Spain. Greece and Portugal and others, they're going to cause waves and issues but they're much smaller pieces of the problem."