Turmoil in the rump of the euro zone would batter export markets just as the north's firms became less competitive.
Financial linkages are less important in CIS countries and in the Middle East and north Africa, but a deeper euro-area recession will batter export industries there, too.The conventional wisdom, nonetheless, is that the world economy could just about cope with stagnation or a shallow recession in Europe.
Domestic consumption is down, foreign competition and the weak dollar have battered exports, overproduction is rampant and needed changes are thwarted by obsolete rules.
Without the drag of the struggling PIIGS (Portugal, Italy, Ireland, Greece, Spain) to hold down its value, a soaring euro will batter German exports, one of the few remaining stalwarts of an otherwise moribund EU economy.
The Bank of England is buying government securities to increase the money supply, while the Swiss National Bank is selling francs to stem a rise in its currency, which has battered its exports.
The other way that the central bank had hoped to bolster the economy was to weaken the yen, which has battered the nation's export industry.
Demetrios Papademetriou, one of the two authors of the MPI study, notes that as economies such as Mexico's are also battered, the push to export migrants could rise again fast.
Battered by imploding exports after overseas demand evaporated late last year and by persistently weak domestic demand, Japan has one of the world's worst-performing developed economies.
The euro area of the European Union and Japan -- their economies are weaker than ours and are also taking a battering from Chinese exports -- should emulate the Fed, pump more money into their economies and lower the values of their currencies.
It also scuttles a chance for the 16 regional leaders, including those from China, Japan and South Korea, to confer on ways to combat the global slump that has battered Asia's export-oriented economies.
South Korea narrowly avoided slipping into recession, and the country's corporate giant, Samsung Electronics, reported better results than expected for the first quarter — news that provided some relief to an economy that continues to be battered by crumbling exports.
