WASHINGTON, October 27 (RIA Novosti) – The West, and Europe in particular, is one or two rounds of sanctions and counter-sanctions away from entering into a new recession, chairman of President Barack Obama’s Global Development Council Mohamed El-Erian stated Monday.
“We are one or two rounds of sanctions and counter-sanctions away from the European politics over the Ukraine tipping Europe into a recession,” El-Erian said in a speech on the BRICS economies at the Peterson International Institute of Economics.
He noted that the impact of level three sectoral sanctions against Russia is “taking the West into a recession through sanctions to the energy sector.”
Arguing against the notion that Western economies are managing to keep pace after the crisis and despite the sanctions against Russia, El-Erian stated, “It may be chugging along in the United States, but Europe is looking at flat growth.”
According to Obama’s global development adviser, Ukraine continues to be a problem. El-Erian concluded, “The current state of play in Ukraine is lose, lose, lose” for Ukraine, Russia, and the West.
While the United States is expected to round out 2014 with three consecutive quarters of growth, Europe is still faltering behind after the 2008-2010 financial crisis. Earlier in the month, Europe’s strongest economy, Germany, revised its growth forecast from 1.8 percent to only 1.2 percent.
In response to unrest in Ukraine, the West has levied three rounds of sanctions against Russia beginning in March of this year. Russia has responded with counter-measures taking aim at European imports, particularly agriculture products.
