By Fernando Alvarez: Ex IMF Economist

World Bank Group President Robert B. Zoellick released on November 4 the following statement at the G20 Summit in Cannes, France:

 "The G-20 today presented an agenda to restore confidence in the global economy through its commitment to reinvigorate growth, create jobs, ensure financial stability, and make globalization more sustainable and inclusive. As with all summit declarations, the proof will be in the implementation.

 "Representing 187 member countries, the World Bank Group is concerned about the spill-over effects from the crisis in the Euro zone on the poor in the developing world. The effects of the crisis have already cast a shadow over growth prospects in developing countries that for the last five years supported the world economy by providing two-thirds of global growth. Trade finance and capital flows are under pressure and the fear is that asset prices and consumer and business demand could also suffer. Developing countries today are in a weaker position, when compared to the crisis year of 2008, to withstand another shock and their people are more vulnerable to downturns than those in developed countries.

By Susana Aguirre

Rosa Aguilar; Spanish Environment, Rural and Marine Minister signed an agenda in Beijing on Monday that will aim to develop cooperation with China on water resources issues.

Water purification and desalination Spanish technology will now expand their potential exports through the collaboration of both countries.

By Susana Aguirre

On Wednesday, during the European summit in Brussels aimed to reach an anti-crisis agreement, German Chancellor Angela Merkel and French President Nicolas Sarkozy took over the banks negotiations to increase the Greek debt loss.

The agreement accepted by all 27 officers of the European Union is to recapitalize the banks, although the total Greek debt loss depends on what each affected agency is willing to accept.

The agreement states that by June 30th, 2012 hard funds banks must be 9% of total assets, compared with the current 5% (social capital and profits in reserve); to achieve this goal, banks will turn to private capital in addition to the restructuring and conversion of debt into equity.

By Fernando Álvarez: Ex IMF Economist

Following a barrage of unfavorable shocks in the first half of 2011, global economic activity has weakened and has become more uneven. A devastating earthquake and tsunami in Japan disrupted global manufacturing; the Arab spring drove up oil prices; financial strains in euro area financial and sovereign debt markets deepened; growth in the U.S. decelerated sharply; and the standoff about raising the ceiling on U.S. government debt sapped confidence in policy making. Against this backdrop, projections for global growth have been revised downward, especially for advanced economies. The October 2011 World Economic Outlook projects real GDP growth worldwide at 4.0 percent for 2011and 2012—about 1/2 percentage point lower than projected in the April 2011 edition.

In Europe, the recovery lost steam in the second quarter, after a surprisingly strong first quarter, with growth in many countries coming to a near stand-still. The deceleration was partly the result of global shocks, which affected mostly those countries in Europe that had benefited so far from the strong global recovery. Yet it was also the result of the escalation of the euro area crisis, which is having a more wide-spread effect on domestic demand, as the confidence shock spreads beyond the periphery to core countries’ consumers, bankers, and investors.