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Dutch Prime Minister Mark Rutte attends a session of the annual World Economic Forum/AFP

World

Don’t relax, Davos warns on global economic crisis

— ‘Mood of complacency’ —
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As in previous years the Davos forum was partly hijacked by external events, particularly after British Prime Minister David Cameron vowed to hold a referendum on European Union membership by the end of 2017.

The move threatened to cause a stir, with Cameron’s European counterparts worried about the effect the uncertainty would have on the euro’s already fragile recovery, but they left any rows for another day.

The turmoil in the Arab world also took centre stage for a time as officials including Jordan’s King Abdullah II urged “desperately needed” action over Syria’s civil war, though none came.

Amid the cocktail parties and lavish luncheons at Davos this year there was sometimes a “mood of complacency”, said Axel Weber, the chairman of Swiss bank UBS and former head of Germany’s Bundesbank.

“My biggest fear is that 2013 could be a replay of 2012, another lost year,” he said. “We shouldn’t be complacent, we haven’t really fundamentally improved that much.”

Many were still worried by the euro. The Deloitte financial group’s global chief executive Barry Salzberg told AFP he was “reasonably comfortable, with one exception — and that is what’s the impact on the US from Europe.”

Other officials expressed fears that governments would increasingly lean on central banks, which have often been the heroes of the fragile global recovery in the past two years, instead of taking action themselves.

But in many ways it was business as usual at Davos, with world leaders huddling in private and corporate deals sewn up on the sidelines, such as a $10 billion shale gas deal between Ukraine and oil giant Royal Dutch Shell.

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Even a noisy protest on Sunday by three topless, pink-flare-waving women from a Ukrainian feminist group failed to shock — they had targeted Davos the previous year too.

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