Europe’s debt crisis remains a far bigger threat to the world’s economy than the “fiscal cliff”, according to the Organisation for Economic Co-operation and Development.

In its latest twice yearly report the OECD warned the world’s major economies could all got back into recession if euro-zone and US policy makers fail to tackle their fiscal crises. The organisation believed an escalation in the ongoing European crisis poses the biggest threat to global economies and could drag Europe into a deep recession in the next two years and the US along with it.