Olivier Blanchard (IMF Economist) said the crisis should last for another year, but normal growth would return only in 2011.

Olivier Blanchard (IMF Economist) said the crisis should last for another year, but normal growth would return only in 2011.
ZURICH (Reuters) - The financial crisis that has engulfed many top banks is spiraling into a broader economic crisis that has yet to peak, International Monetary Fund's top economist Olivier Blanchard told a Swiss newspaper on Saturday.
Blanchard said the crisis would continue for another year and called on governments to promote fiscal expansion and on central banks to cut rates toward zero.
"The worst is yet to come," he was quoted as saying in Finanz und Wirtschaft as he noted how the banking sector's woes had started to spill over into the real economy by hitting the carmaking industry.
"This is only the beginning," he added. "The risk exists that the data will get worse and worse, which would then lead to more pessimistic expectations and accelerate a fall in demand."
"It will take a long time before we go back to normal conditions."


Obama economic plan aims for 2.5M new jobs by 2011
Saturday November 22, 12:36 pm ET
By Will Lester, Associated Press Writer
Obama economic plan focuses on job creation, public works projects, alternative energy sources
WASHINGTON (AP) -- President-elect Barack Obama promoted an economic plan Saturday he said would create 2.5 million jobs by rebuilding roads and bridges and modernizing schools while developing alternative energy sources and more efficient cars.
"These aren't just steps to pull ourselves out of this immediate crisis. These are the long-term investments in our economic future that have been ignored for far too long," Obama said in the weekly Democratic radio address.
The goal is to get the plan quickly through Congress, with help from both parties, after Obama takes office Jan. 20. The plan, which envisions those new jobs by January 2011, is "big enough to meet the challenges we face," he said.

Report: Soros says more needed for US bailout
BERLIN (AP) - American investor George Soros said he would like to see Washington put $300 to $600 billion more into the $700 billion U.S. economic bailout package, the German magazine Der Spiegel reported in an advance of Monday's edition.
The weekly quoted the billionaire as saying that the United States needs a bigger economic program than the existing Troubled Asset Relief Program package to accommodate American cities and states with the money they need to get out of the financial turbulence, and that the country needs an infrastructure investment program.
Soros also criticized U.S. Treasury Secretary Henry Paulson for not seeing the economic crisis earlier.
Paulson "reacted to the problem once it was already out in the open. He didn't have the ability to see the problem coming," Soros was quoted as telling Der Spiegel.


Balkenende presenteert plan voor economie
DEN HAAG (ANP) - Het kabinet komt met een pakket van maatregelen om de economie te ondersteunen. Dat heeft premier Jan Peter Balkenende vrijdag gezegd. Het gaat onder andere om een tijdelijke WW-uitkering voor werknemers die tijdens de economische tegenwind overbodig zijn.
Naast deze zogeheten werktijdverkorting kondigde Balkenende verder aan dat de overheid bedrijven gaat ondersteunen door rekeningen voor verleende diensten eerder over te maken aan ondernemers. Bovendien mogen zij investeringen versneld afschrijven. Bedrijven kunnen op die manier gemakkelijker nieuwe investeringen doen.