November 10th, 2011
06:40 AM GMT
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(CNN) – With the flood of woeful financial news coming out of Greece and Italy, it’s easy to forget something Goldman Sach’s Jim O’Neill is quick to point out – the world doesn’t depend on Greece and Italy.

“This year the increase in China’s GDP will be the equivalent of creating three new Greek economies.  The increase in the BRIC countries GDP’s –that’s China along Russia Brazil and India – will be close to the equivalent of creating another Italy,” said O’Neill, who coined the term BRIC to refer to the developing economic titans of Brazil, Russia, India and China.

“So yes, we’ve got enormous problems in the core of the developed world, but that isn’t the modern global economy.   The world will probably grow by close to 4% next year despite the fact that the euro might be in recession.”

What’s happening in the eurozone is vital, yet steady growth out of the world’s largest economy, the U.S., suggests another global recession may not be inevitable, O’Neill told Global Exchange.

“In my judgment, first of all the U.S. is not heading for a double dip, the US economy actually recently has positively surprised many expectations and I think it’s going to be stuck with 2-3 percent growth for quite some time,” he said.

Still, the Italy crisis is taking the world into “new and dangerous territory.”

“The European financial system and to some extent the world’s economy and markets can’t cope with Italy blowing up in the same way Greece did,” O’Neill said.

“In Europe, the areas that have been in trouble until now, are all small economies, but Italy is a biggie,” he said. “The policymakers have to do something to get Italian bond yields back down.  Or there are going to be consequences for everybody else both in Europe and elsewhere, whether it be the emerging markets or the rest of the developed world. So what happens involving European policymakers with Italy here is absolutely crucial.”

Filed under: BusinessChinaGlobal ExchangeGreeceIndia

soundoff (29 Responses)
  1. sengokumusou31

    It's a really big problem!!! [for all over the world]
    Since there's already Greek's one now, I think it's natural we can't afford to see Italy.[& Ireland Portugees... also]
    I 'd like to manage to help them, but they should work somehow!!

    November 10, 2011 at 7:14 am |
  2. Dantx10

    There goes Olive Garden! Oh well.

    November 10, 2011 at 7:21 am |
  3. marko

    What a joke to think italy needs fixing they borrowed money that never existed in the 1st place.....Federal reserve is a private company....meaning someone else owns our money...
    Why not have the Rothchilds bail us out I heard the have 500 $ trillion....

    November 10, 2011 at 7:40 am |
  4. Mike

    Sounds like Goldman Sachs is long on Italian securities.

    November 10, 2011 at 7:43 am |
  5. SeenItAllBefore

    The current upheaval is the direct consequence of intentional speculation by US/UK financeers. You don't need much, just let a few 'experts' put up a worried face in the media. People are forgetting that it is all a matter of selective media attention. It is a complete riddle to me why the US should be off the hook, here, with its immense debt, deficits and non-transparant financial structure, dominated by a few families. While the causes of debt differ, in essence the difference with Italy, Greece, or Ireland is not so large. Countries should be prohibited to lend too much, and should lean much more on autarchy: being self-sufficient. If you cannot earn it by exports income, you apparently do not deserve it.

    November 10, 2011 at 8:11 am |
  6. Jeff

    Europeans need to grow up and fend for themselves. They're like little kids who don't wanna give up mommy's teets.

    November 10, 2011 at 8:17 am |
  7. ed

    Official German government debt is 82%, but the real one is 110% gdp. They hide the money offered to East Germany, by public companies. They rigged the accounts as the Greeks. Speculators attack the Germans

    November 10, 2011 at 9:05 am |
  8. ed

    French public debt has grown much more than Italian: from 1996 to 2010 grew from 52% to 82%: The deficit is 7.8% in France, 3.9 in Italy. Even U.S. has a debt of 100% of GDP and a deficit of 10%: the next victim will be U.S.?

    November 10, 2011 at 9:06 am |
  9. ed

    Italy has a deficit gdp equal to 1 / 3 in GDP of the U.S., the world is weird, right?

    November 10, 2011 at 9:06 am |
  10. steve mann

    When are these European Bureaucrats going to realise this Union is over- It was doomed from day one- Unlike the USA there are so many differing cultures and languages that regardless of the global downturn this was going to happen.
    The auditors have refused to sign off the accounts for the EU for over the last 15 years- what does that signify-
    They are so full of egotistical chest puffing- they had to have two parliaments- They have embassies around the world- a "So called " president- It can not work- Italy, Greece or anyone else.
    The Soviet Union only lasted 70 years. Wake up.

    November 10, 2011 at 10:01 am |
  11. TYU

    People from that gang called Goldman Sachs, are last on the planet Earth who should comment this. They hidden real Greek debt from European regulators, so theirs criminal activity put world in this plaice now. If Italy go down, most likely Spain and Portugal will follow, and French and German economies will not be able to bailout them all.

    November 10, 2011 at 10:04 am |
  12. km

    Too big to fail? All over again?

    November 10, 2011 at 10:06 am |
  13. P.I.G.S

    Broke? Don't worry, the world will bail us out.
    Credit downgrade? No worries, we'll be fine again in a couple of years.
    Economic crisis? Ah look, we're not the only ones. We'll be fine.
    You got a cigarette to spare?

    November 10, 2011 at 10:41 am |
  14. ed

    U.S. has a debt of 100% of GDP and a deficit of 10%: the next victim will be U.S.

    November 10, 2011 at 10:55 am |
  15. ed

    U.S. has a debt of 100% of GDP and a deficit of 10%: the next victim will be U.S.?

    November 10, 2011 at 10:55 am |
  16. Dani3l

    The fundamental, underlying assumptions of global finance are irreparably flawed. Balance all of the debt in the world against all of the wealth, and what is left? We can move the shells around all we like... but there is still a nasty surprise labled "Imaginary Wealth" under one of them. We need to ground monetary wealth in physical reality – and take control away from those who broke the system by looting it to make themselves rich at out expense.

    November 10, 2011 at 11:13 am |
  17. Dani3l

    Oh – bailout for Italy? Two words:


    November 10, 2011 at 11:15 am |
  18. addisu

    those italians colonized my soverign state ethiopia, we wilsh the people a cool understanig to defeat crisis

    November 10, 2011 at 11:54 am |
  19. bahadır

    yep print money –then financial banks erase 100 billion euro greek debt ask china please give us money yep china says you got it hahahhaa whenever you want usa does same-we don t wanna work we just want from you give money to us l gave my people spent and buy chinese products your people work 70 hours my people spent it- -why you make war all oil producer countries especially muslim world is it a crusade or petrodollar thing china russia asks with a smile on their face –like they want this hahahaha economy goes worse and no hide need a war –3 world war-end of a capitalist system the ignorant media minded people destroys itself thats it-what a economy global corruption is ending–spent the money which is not yours ...

    November 10, 2011 at 12:19 pm |
  20. bahadır

    2012 are u ready inflation usa -usa usa hahaha
    no production but too much begging.. money please give us money–the owners asks how you pay back sucking enough they say no now you have to bend over the chinese says thats it the end of capitalism and their stupid media and politics all around the world.

    November 10, 2011 at 12:24 pm |
  21. y22nxdf2

    Where have I heard that before? This wouldn't happen to be a global heist by evil bankers?? Nah...I'm probably delusional. Job-creators are all nice people.

    November 10, 2011 at 12:54 pm |
  22. Jsmith

    Sorry, Jim, not buying it. "Too big to fail" is a recipe for disaster. The real questions are, Is Italy responsible for itself as a sovereign nation, and to what degree should other nations with unstable financial situations (USA, rest of Europe) risk their own well-being to help a country that won't help itself?

    November 10, 2011 at 1:37 pm |
  23. Garry

    This whole 'too big to fail' BS is just that. This game of ring around the rosie is just the money grubbers continuing their money grab. After they suck every concession from each country in turn, these countries are left with debt that can NEVER be repaid...even if the people are left to starve. The Americans posting here apparently have a short memory...but not to fear, goldman, et al, aren't finished with us yet either. Fake money, fake debt, fake masters. It's time to put a halt to this BS and start letting these corporate vampires drop dead. Iceland did not fall into the sea after they refused to pay the 'protection money' and neither will the rest of the worlds countries.

    November 10, 2011 at 2:07 pm |
  24. Marcus

    Time to retire the developed/developing stuff and decide if we are one, two or three worlds. And if there is more than 1 world, then let US and Europe go the way they will. BRICs should not put money there or they will use it to build weapons to destroy us, the "underdeveloped", for now, at least...

    November 10, 2011 at 3:37 pm |
  25. radicalnessification

    I really, really hope that the Rothschilds do not have 500 trillion dollars...

    Most of the world's contries are run by a few families (secretly or openly) and this needs to be addressed. Too many insanely rich families have too much power and influence. Speculators appear to be a major problem as well, as they are not burdened by any regulation.

    I know it is passe to still talk of W. Bush, but his administration deregulated the entire US economic system, and I have a feeling the same has happened amongst the EU. Without oversight and rules, those with enormous financial clout will abuse the system. In my state alone, Texas, only a handful own everything. And I'm sure my fellow human beings are experiencing the same thing in Europe.

    We are all in this together, no matter what country, nation, or silly religion one follows. We are a global community now, whether one likes it or not. And that will not change; we will only get more integrated over time.

    November 10, 2011 at 4:42 pm |
  26. JJackson

    George Bush deregulated THE ENTIRE financial system? Can you explain what the hell that means? If you mean who passed a law that allowed no regulation of financial derivatives that would be one William Jefferson Clinton. Look up commodity futures modernization act of 2000 (while Bush was still gov of Tejas). Get a grip dude. Neither side of the aisle is smart enough to know what their actions cause down line!

    November 10, 2011 at 5:17 pm |
  27. Michael Steinberg

    All will be well..print money, extend the debt, shift liabilities, keep interest rates low!!! And you would never know we are BANKRUPT!!!!

    November 11, 2011 at 4:21 am |
  28. Rob

    Let them fail! The USA should not spend one dime to rescue another foreign nation. We have our own problems and they are not being solved by our leaders. Just look at the Occupy Wall Street movement and any idiot can see the USA is on the verge of a revolution. What our leaders don't realize is through social networking sites, the American public is seeing through the official government propaganda and sick of the blatant lies. Likewise, I suspect the American military will side with the people against the government. Politicians clean up the corruption in Washington and the sweat-heart deals before it is too late.

    November 11, 2011 at 2:54 pm |
  29. icon package

    I know, how it is necessary to act...

    P.S. Please review Diamond Icon from graphic-icons

    September 19, 2012 at 10:52 pm |

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