The International Monetary Fund (IMF) has dropped its growth forecast for Europe and warned that another global recession next year cannot be ruled out.
The IMF sounded the warning while urging European governments to recapitalise their banks to stem the crisis which is threatening economic growth, the ABC reports.
The IMF report forecasts growth for Europe to slow to 2.3% in 2011 and to 1.8% in 2012.
If governments do not shore up their banks, a recession - defined as two consecutive quarters of negative growth - cannot be ruled out.
In a controversial move, the IMF report has recommended a change to government policies away from austerity and back towards stimulus.
