OECD cautiously predicts 'policy-induced' global recovery next year as stimulus spending flows

Haunted perhaps by the ghost of Herbert Hoover, global leaders have steered the world away from a 1930s-style Great Depression by a "very, very, high level of awareness" of the policy errors of his era, a top international economist said as he released an OECD study of efforts to save the world economy.
Klaus Schmidt-Hebbel, chief economist for the Organization for Economic Cooperation and Development, spoke to The Associated Press as he slashed forecasts for growth in the 30 rich countries that make up its membership, predicting the economies of the OECD countries will shrink by 4.3 percent this year, and by 0.1 percent next year.
The new forecasts released Tuesday compare with a November forecast that the OECD economy would shrink by 0.4 percent this year and grow by 1.5 percent in 2010.
It would have been worse without government stimulus plans, which will add 0.5 percent to the OECD economy this year and next, according to the Paris based organization. The new spending is a sharp contrast with Hoover-era policy, which saw protectionism and efforts to balance budgets and raise interest rates.
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European car industry slumps amid financial crisis

European carmakers are taking a beating from the financial crisis, announcing an alarming series of profit warnings and production stoppages this week, as the industry braces for the financial crisis to turn into a severe economic slump.

French automakers PSA Peugeot Citroen and Renault SA announced massive production cuts Thursday and Friday. Earnings tumbled at Swedish truck maker Volvo AB, German automaker Daimler AG issued a profit warning, and Italy's Fiat Group SpA warned of a worst-case scenario that could see sales dropping up to 20 percent next year.

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French Left: From the fringe to vindication

PARIS - As printing presses churn out revolutionary leaflets, one of France's most popular leftist politicians says plunging stocks, frozen credit markets and bank failures are signs the world economic system is rotten — and needs to be overthrown.

"A page is being turned," declares Olivier Besancenot, leader of France's Revolutionary Communist League.

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American version.

PARIS - When storied Wall Street firm Lehman Brothers Holdings Inc. fell, France looked on in disbelief as the U.S. government refused to rescue the 158-year old firm and its 25,000 employees.

Uncle Sam was pictured in a front page cartoon in Le Monde chucking a wreath at the bank's headquarters as it sank in turbulent waters.

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