OECD warns of economic uphill struggle next year

LONDON (Dec 12): An OECD report due for release this month will say
markets and governments face an uphill struggle to fund themselves next
year amid extreme uncertainty over the euro zone and the global economy,
the Financial Times said on Monday.

The report will say that financial stresses are likely to continue
with the unpredictability of markets threatening the stability of many
governments that need to refinance debt.

"(On occasion), market events seem to reflect situations whereby
animal spirits dominate market dynamics, thereby pushing up sovereign
borrowing rates with serious consequences for the sustainability of
sovereign debt," Hams Blommestein, head of public debt management at the
Organisation for Economic Co-operation and Development, is quoted as
saying.

For the foreseeable future it will be a "great challenge" for a wide
range of OECD countries to raise large volumes in the private markets,
with so-called rollover risk a big problem for the stability of many
governments and economies, the article said.

The OECD says, according to the FT, that the gross borrowing needs of
OECD governments are expected to reach $10.4 trillion in 2011 and will
increase to $10.5 trillion next year - a $1 trillion increase on 2007
and almost twice as much as in 2005. - Reuters