TIANJIN, Sept. 11 (Xinhua) -- Europe's real economy is facing increasing risks due to the sovereign debt crisis though the eurozone is becoming less hazardous, a senior International Monetary Fund (IMF) official said here Tuesday.
The eurozone crisis is stabilizing and risks are decreasing in the region's fiscal and monetary systems as well as in its financial markets, Zhu Min, IMF deputy managing director told reporters at the ongoing 2012 Summer Davos Forum, in Tianjin city. However, he said the risks to economic growth are rising.
Deterioration in the European economy will render a huge impact on the global economy as Europe is one of the world's largest economies and accounts for one third of value-added exports to Asia, Zhu said.
"We should talk more about the growth side, not the financial side (of the eurozone crisis)," he told a panel discussion during the forum.
In the worst case of scenario, a more disastrous situation in Europe could lead to a 1.5 percent-2 percent growth cut in the U.S. and a 1 percent-1.5 percent cut in China, as IMF models showed, Zhu said.
However, he called that scenario as a "tail risk" and acknowledged that the whole of Europe is moving in the right direction, though the crisis is not over and there remains a long way to go.
"I don't think the euro will collapse and I advise everyone to have confidence in the currency," Zhu said.
The eurozone saw its gross domestic product value shrink 0.2 percent in the second quarter of the year from the previous quarter.
The European Central Bank (ECB) last week unveiled a new bond-buying program that will make open-ended purchases of short-term government bonds to keep the borrowing costs down for struggling European countries.
The IMF is ready to participate in the ECB program by helping draw up conditions attached to the program and supervise its implementation, Zhu said.
The forum, also known as Annual Meeting of the New Champions 2012, is from Sept. 11 to Sept. 13 and will be the sixth of its kind held in China.
Themed "Creating the Future Economy", the three-day forum will feature interactive programs on issues including the euro crisis, China's future economy and global food security.