05 May 2009

EU makes bleak economic Predictions

Today the European Commission has released its latest economic predictions in Brussels.

According to its calculations, the EU economy overall is expected to shrink by 4% over the next year, with unemployment reaching 11.5%.

The Irish economy will, based on EU calculations, shrink by 9% this year. This is clearly (by 1.3 points) higher than the prediction Ireland's Finance Minister Brian Lenihan gave. In his budget speech last month, Lenihan announced a contraction of 7.7% for the domestic economy.
However, the Dublin-based Economic & Social Research Institute (ESRI) has forecast only a week ago (see my entry of April 29th) that Ireland would have economic contraction of 9.2% (1.5 points more than Lenihan's view, and 0.2% more than today's EU prediction).
Whichever figure - if any - is correct, only time can tell. But the general outlook for the EU, and in particular for Ireland, is pretty bleak.

"We are no longer in a free-fall, but even if some positive signals are now appearing, we do not have the critical mass of data to say that we are out of the woods," declared Joaquin Almunia (right), the EU Commissioner for Economic and Monetary Affairs, in a press briefing this morning.

The Commission says that there will be "a modest recovery" in the second-half of 2010, but "unemployment in the EU will rise sharply" with the disappearance of approximately 8.5 million jobs throughout the union.

At the news conference in Brussels Commissioner Almunia commented that Ireland's recent supplementary budget was "a step in the right direction".

Speaking also in Brussels, where he attended a meeting of finance ministers from the Eurozone, Brian Lenihan (left) said that "forecasting is not an exact science" and that the "performance of Ireland's export sector is encouraging".
Such pearls of wisdom from the political art of saying nothing are now the standard of 'information' we get from our government, which is ever more in disarray and under siege ever since it lost the referendum on the Lisbon Treaty eleven months ago.
A little more truth and clarity would be welcome, but then again, one should not expect too much from a Fianna Fáil politician.

The Emerald Islander

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