THE world has moved into a "new and more dangerous phase" of economic uncertainty because of the European sovereign debt crisis, according to World Bank president Robert Zoellick.

In an exclusive interview with The Weekend Australian, Mr Zoellick said the European economic problems were far more intractable and serious than the US economic problems.

And he worried that the British riots could derail the British budget austerity program.

"I believe what (British Prime Minister David) Cameron is doing in the UK is really necessary. My concern would be if the politics knocked it off course."

But Mr Zoellick sounded an optimistic note for Australia, saying its long experience of Asia, and its deep integration in the Asian economy, combined with its familiarity with the US, "gives Australians a chance to punch above their weight".

http://www.theaustralian.com.au/national-affairs/danger-ahead-says-world-bank-chief-robert-zoellick/story-fn59niix-1226114114095

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AUSTRALIA’s economy received a double tick with positive comments from the head of the World Ban, Robert Zoellick and the Commonwealth Bank’s CEO Ralph Norris.

Speaking at the Asia Society dinner in Sydney, Mr Zoellick also said the global economy was going through a multi-speed recovery, with developing countries now the source of growth and opportunity.

Australia is better placed to withstand another global financial crisis than other developed economies, Mr Zoellick said.

Speaking to reporters after the dinner, Mr Zoellick suggested Australia could afford to deploy another stimulus package if the global downturn hit the local economy.

“In general, I think most economies are now in the position where they’ve used a lot of their fiscal space and monetary policy is about as loose as it can be,” he said.

“Australia is in a different situation.”

http://indaily.wordpress.com/2011/08/15/world-bank-boss-backs-australian-economy/