The global economy can only return to growth once looser monetary policy is employed by both Europe and the United States, including more quantitative easing, said Bob Parker, senior advisor at Credit Suisse.
“Growth seems to be a major problem not just in Europe but also in the States where it appears to have stalled. In the last two months the real worry has been the slowdown of the German economy,” he told CNBC’s “Squawk Box Europe.” “I think to kick start growth you are going to see some measures this weekend such as deficit targets being delayed by one year and infrastructure projects.”
European Union heads of state meet in Brussels at the end of this week to discuss such measures to tackle the euro zone debt crisis. The European Commission has already granted crisis-hit Spain an extension to a deadline to reach tough deficit targets.
Some EU member states have indicated they are also prepared to give Greece some leeway in achieving deficit targets.
“It probably means (a third long-term refinancing operation ) in Europe, an interest rate cut by the (European Central Bank) and eventually (a third round of quantitative easing) by the Fed. One of the key themes for July and August will be another round of monetary easing,” he added.
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