* Euro zone in fresh crisis talks over Greece
* Budget wrangling in US, EU could sour sentiment
* Euro area set for poor PMIs; China's might pick up
By Alan Wheatley, Global Economics Correspondent
LONDON, Nov 18 (Reuters) - With every year that passes, fewer and fewer
people lead a life that is poor, nasty, brutish and short. So it is only right
to step back, as America does this Thursday, to appreciate the bounties
bestowed by economic progress.
Yet this Thanksgiving, with the impact of the 2008 global financial
crisis refusing to fade, will not feel like a time to celebrate.
In Europe, another week brings another meeting of finance ministers to
try to 'save' Greece as well as another set of surveys likely to show the euro
zone heading for another quarter of recession.
And in the United States, despite warm words after talks on Friday,
worries about the capacity of politicians to put the public finances on a
sustainable footing are sure to persist.
Ward McCarthy, chief financial economist at Jefferies in New York, said
he was sceptical of the consensus that Democrats and Republicans would strike a
budget bargain by the year-end deadline for the two sides had painted
themselves into corners.
He said it was important to distinguish between the compromises needed
to dodge the immediate 'fiscal cliff' - a mix of tax increases and spending
cuts set to take effect in January - and a long-term deal to slash the deficit.
"It's virtually impossible to get a long-term budget deal done
before the end of the year. The fiscal cliff doesn't end the process; it's just
the beginning. So we still have the threat of another credit downgrade hanging
over our head," McCarthy said.
Joe Carson, an economist at AllianceBernstein in New York, shares those
concerns; a short-term fix would not provide the clarity that businesses and
"And without a legislative solution to the federal deficit and
ever-rising federal debt problem, the U.S. runs the risk of another credit
rating downgrade, with the added costs and uncertainty that could also weigh on
economic growth prospects for years to come," Carson said in a note.
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