OECD cuts euro-zone forecasts, backs Eurobonds

FRANKFURT (MarketWatch)
The Organization for Economic Cooperation and Development on Tuesday cut its forecast for growth in the euro zone and said policy makers should consider taking steps to pave the way for the joint issuance of Eurobonds alongside other measures
In its latest economic outlook, the Paris-based organization forecast euro-zone gross domestic product to contract by 0.1% in 2012 before returning to growth of 0.9% in 2013
The OECD said elections in a number of euro-zone countries signal a rise in "reform fatigue."
The outlook warned that a "combination of enduring financial fragility, rising unemployment and social pain may spark political contagion and adverse market reaction."
The OECD said fiscal consolidation and "structural measures" must proceed hand-in-hand to make the process "as growth friendly as possible."
The OECD forecast U.S. GDP growth of 2.4% this year and 2.6% in 2013
Japan is forecast to expand 2% in 2012 and 1.5% in 2013