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BackThe presentation of the autumn forecast 2012-14 by the European Commission on 7 November in Brussels confirmed what had been feared by many: Europa is not making any headway and cannot find its way out of the crisis. The decline of Gross Domestic Product (GDP) for the entire EU for 2012 is estimated at 0.3 %; whereby a hardly recognisable rise of 0.4 % in economic growth has been predicted for 2013.
According to the study, the Euro area has been affected even worse; here the Commission forecasts a decline of GDP by 0.4 % for 2012 and predicts a slight but positive growth of 0,1 % for 2013. Austria might be cheered up to some extent by slightly positive figures, i.e. 0.8 % economic growth for 2012 and 0.9 % for 2013, which represent moderate, but at least not negative economic growth.
Whilst the economy will grow moderately in 2014; according to the Commission things will look up in 2014, as values between 1 % and 2 % growth of GDP have been forecast.
Unemployment will reach its highest level in 2013
Unemployment figures will continue to rise throughout Europe even though they have already reached a sad historical record. Not least because of the misguided and counterproductive crisis recipes of the Troika made up of ECB, IMF and European Commission. Here too, at 11.3 % in 2012 and 11.8 % in 2013, the Eurozone presents a negative example. At an unemployment rate of 10.5 % in 2012 and forecast 10.9 % for 2013 things are not looking much better for the 27 EU countries. However, the greatest cause for concern is the forecast of the Commission for 2014: the unemployment rate of 10.7 % has been predicted for the 27 EU countries and of 11.7 % for the 17 Member States of the Eurozone. Due to her active labour market policy, Austria belongs to the model students in the EU. The Commission based its calculations on an Austrian unemployment rate of 4.5 % for 2012; however, predicted an increase of 4.7 % in 2013, which also includes Austria. The Commission showed slight optimism for 2014 and forecast a drop of the unemployment rate to 4.2 %.
Budget consolidation remains highest priority
In spite of the admission of the International Monetary Fund (IMF), to have wrongly calculated and underestimated the so-called fiscal multipliers, i.e. the negative impact of blind austerity policy on economic growth and employment, the European Commission continues to insist on the one-side austerity policy, imposed by itself and the Troika. “Europe must continue to combine sound fiscal policies with structural reforms”, commented Olli Rehn, Vice President of the Commission, at the presentation of the forecast. Trade Unions, labour representations and recently also the IMF have started to demand a departure from the one-sided austerity policy, as this weakens the economy and drastically increases unemployment. However, the European Commission is still far way from accepting these facts.
Hence, the main priority of the policy to tackle the crisis will continue to be placed on reducing national debt and making even more government budget cuts.
The results of the autumn forecast of the European Commission as well as previous studies of renowned institutes of economic research show that not only employees have to pay with unemployment and lower levels of prosperity for this one-sided policy of spending cuts. The target of this policy, to get on top of national debt and deficits, remains more than questionable. After all, consumer demand depends on the spending power of the workforce. Cuts at their expense, which is the favourite recipe of the Troika, strangle growth and result in low tax revenue. That is why Europe is unable to make any headway.
Link:
Forecast
Whilst the economy will grow moderately in 2014; according to the Commission things will look up in 2014, as values between 1 % and 2 % growth of GDP have been forecast.
Unemployment will reach its highest level in 2013
Unemployment figures will continue to rise throughout Europe even though they have already reached a sad historical record. Not least because of the misguided and counterproductive crisis recipes of the Troika made up of ECB, IMF and European Commission. Here too, at 11.3 % in 2012 and 11.8 % in 2013, the Eurozone presents a negative example. At an unemployment rate of 10.5 % in 2012 and forecast 10.9 % for 2013 things are not looking much better for the 27 EU countries. However, the greatest cause for concern is the forecast of the Commission for 2014: the unemployment rate of 10.7 % has been predicted for the 27 EU countries and of 11.7 % for the 17 Member States of the Eurozone. Due to her active labour market policy, Austria belongs to the model students in the EU. The Commission based its calculations on an Austrian unemployment rate of 4.5 % for 2012; however, predicted an increase of 4.7 % in 2013, which also includes Austria. The Commission showed slight optimism for 2014 and forecast a drop of the unemployment rate to 4.2 %.
Budget consolidation remains highest priority
In spite of the admission of the International Monetary Fund (IMF), to have wrongly calculated and underestimated the so-called fiscal multipliers, i.e. the negative impact of blind austerity policy on economic growth and employment, the European Commission continues to insist on the one-side austerity policy, imposed by itself and the Troika. “Europe must continue to combine sound fiscal policies with structural reforms”, commented Olli Rehn, Vice President of the Commission, at the presentation of the forecast. Trade Unions, labour representations and recently also the IMF have started to demand a departure from the one-sided austerity policy, as this weakens the economy and drastically increases unemployment. However, the European Commission is still far way from accepting these facts.
Hence, the main priority of the policy to tackle the crisis will continue to be placed on reducing national debt and making even more government budget cuts.
The results of the autumn forecast of the European Commission as well as previous studies of renowned institutes of economic research show that not only employees have to pay with unemployment and lower levels of prosperity for this one-sided policy of spending cuts. The target of this policy, to get on top of national debt and deficits, remains more than questionable. After all, consumer demand depends on the spending power of the workforce. Cuts at their expense, which is the favourite recipe of the Troika, strangle growth and result in low tax revenue. That is why Europe is unable to make any headway.
Link:
Forecast