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1 mars 2013

Commission remains prisoner of failing austerity policies

Last week the European Commission presented its latest economic forecasts for 2013 and, despite the disappointing figures, continued to insist on the need for tough austerity measures. A few days earlier it had also adopted a communication on social investment.

“Gradually overcoming headwinds” was the rather optimistic title of the press release announcing the Commission’s Winter Forecast 2013. But behind the optimism lurks the hard reality. According to the report, the Eurozone economy will shrink by 0.3% in 2013 (for the EU27 it will grow by 0.1%) and unemployment will continue to grow to 12.2% for the Eurozone and to 11.1% for the EU as a whole.

EU Economic and Monetary Affairs Commissioner Olli Rehn remained true, nonetheless, to his image of Mr Austerity and urged EU member states “to stay on course”.

A similar message was delivered by Commission President Barroso, commenting a few days later on the electoral backlash in Italy against the EU’s austerity policy. Although one national austerity government after another seems to receive punishment from the electorate, the EU President urged governments to stick to their austerity remedies.

Since the beginning of the crisis, the Commission’s economic predictions have been systematically overoptimistic. At a recent ETUI conference on the crisis of the labour market, Prof. Dr. Gustav A. Horn, IMK Director at the Hans Böckler Foundation, demonstrated how the Commission’s annual GDP forecasts for Greece had been seriously wrong not just once but for every year since 2007.

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