Rehn ready to sacrifice part of the real economy

Press conference by Olli Rehn, Vice-President of the EC, on the winter economic forecasts for 2013-2014. (EC Audiovisual Services).

Press conference by Olli Rehn, Vice-President of the EC, on the winter economic forecasts for 2013-2014. (EC Audiovisual Services).

Last week, Ollie Rehn, the EU Commissioner responsible for the Economy, while presenting his “winter forecast 2012-14” for the Union, appeared not to bother with the prospects of the rising unemployment and the collapsing prospects for the young. Otherwise it cannot be explained why he said that, “The ongoing rebalancing of the European economy is continuing to weigh on growth in the short-term (however) we must stay the course of reform and avoid any loss of momentum, which could undermine the turnaround in confidence that is underway, delaying the needed upswing in growth and job creation.”

Speaking about the “momentum” obviously he is not referring to growth prospects. He means exactly the opposite that is the momentum of the dreadful austerity programmes, now covering the entire Southern part of our continent and infecting the rest of it. He actually says, without any remorse, that the slightest relaxation of all those draconian programmes imposed on many Eurozone countries, “could undermine the turnaround in confidence that is underway, delaying the needed upswing in growth and job creation”.

Rehn however does not limit himself to praising the utterly unpopular economic measures. He also tries to hide the facts. This is the ultimate refuge of the “long term” economists, who whenever faced with facts contradicting their ideology, take refuge to silence. In the text of the Press release with which the Commission presented to the world its “Winter forecast 2012-14”, there is nowhere mention of the fact, that in 2012 the Eurozone lost 0.6% of its Gross Domestic Product. One has to enlarge the huge tables with the small digits, in order to clearly see that. Nor is mentioned in this text, that this small looking decrease of GDP by 0.6% means a 100% loss for those who lost their job because of it, and also for those who couldn’t find one. Obviously this story was repeated hundreds of thousands of times last year but Rehn couldn’t care to underline that.

Unfortunately for us all the bad news doesn’t end there. Eurozone will also lose parts of its income this year too, estimated by Mr Rehn at -0.3%. He refers to that explicitly in the text of the Press release. Probably because he thinks that this is a small cost, compared to the ‘achievement’.  What achievement? Obviously he means the draconian cuts in almost all EU government budgets and also in EU’s proper budget. What else could he mean when he said that, “The decisive policy action undertaken recently is paving the way for a return to recovery”? We can understand which the “decisive policy action” was, but we cannot see the return to recovery. Unless he is happy with a predicted 1.4% increase of GDP in the year 2014. Unfortunately again for all of us, this is within the statistical error margin and even Rehn can be wrong.

The financial markets

Now what about the financial markets? In this domain Rehn feels at home. He is very happy with the good developments in the financial markets during the past six months. That is why the Press release commences exactly with such an observation. It goes like that, “While financial market conditions in the EU have improved substantially since last summer, economic activity was disappointing in the second half of 2012”. Presumably the markets that Rehn has in mind feel the same way about the real economy as the Commissioner. On this account we will just remind Mr Rehn that the Greek stock exchange gained more than 30% during 2012, a year when hundreds of thousands of people there lost not only their jobs but also their hope for the future. If this is a positive development then Rehn had better keep it for himself.

Last but not least one can easily distinguish the love of Mr Rehn for exports. Ollie observed happily, “The pick-up in growth will initially be driven by increasing external demand”. Again the “long term” minded economist is revealing himself, by choosing a postponement of a strengthening of internal demand. A higher internal demand could materialise by an increase of the current level of consumption and investment, signalling a betterment of the wellbeing of us all. But no, the Commissioner prefers the exports.

All in all, Mr Rehn despite being in charge of the economic realities affecting us all, he keeps praising the future against the present. This is not economic policy though, it’s pure ideology. Isn’t it true Mr Commissioner that we are all paying now the cost to save the Eurozone, the bankers came close at destroying? The same bankers you are taking care of to be recapitalised and their liquidity replenished.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Will the Greek economy ever come back to growth?

General Assembly officially adopts roadmap for migrants to improve safety, ease suffering

Yesterday’s “jokes” and sarcasm by Digital Single Market’s Vice President Ansip on EU member states’ right to protect their telco markets

A Sting Exclusive: “Infrastructure can lay the groundwork for the Sustainable Development Goals” by Mr Fulai Sheng, UN Environment Senior Economist

How to tap the talents of refugees – one student at a time

Foreign Affairs Council (Trade) of 22/05/2018: EU relations with key trading partners

Brexit: political groups discuss options for an orderly withdrawal

‘Warp speed’ technology must be ‘force for good’ UN chief tells web leaders

EU: Protecting victims’ rights from cartels and market abuses

Health: The neglected aspect of climate change

A Europe that Protects: Commission calls for decisive action on security priorities

COP21 Breaking News: “We must accelerate the process”, Laurent Fabius cries out from Paris

MEPs to vote on overhaul of road transport rules in July

Trying to cure bank cancer with analgesics

Scotland in United Kingdom: It’s either the end or the beginning of the end

It’s Brexit again: Nigel Farage launches a personal campaign to lead the ‘No’ front

ECB should offer more and cheaper liquidity if Eurozone is to avoid recession

Income inequality threatens the socio-political structures in developed countries

“Sorry mom it’s not our day”: the true refugee story of a young doctor and his family forced to flee their home

Parliament approves €500 million for schooling of refugee children in Turkey

ILO discusses world of work response to global refugee crisis


Re-thinking citizenship education: bringing young people back to the ballot box

Top UN officials sound alarm as Yemen fighting nears vital hospital in port city of Hudaydah

ECB: Reaching the limits of its mandate to revive the Eurozone economy

Here are four ways ASEAN can help entrepreneurs thrive – especially women

Cameroon: Clear ‘window of opportunity’ to solve crises rooted in violence – Bachelet

A silent killer: the impact of a changing climate on health

EU budget: Will Germany alone manage Britain’s gap?

Taking fast road to ‘e-mobility’ central to a sustainable future: COP24

The UK to split if May’s hard or no-deal Brexit is pursued

UN agriculture agency chief calls on world’s mayors to make ‘global commitments local realities’

South Sudan: UN condemns ‘brutal’ sexual assaults on roads to Bentiu

6 things to know about the General Assembly as UN heads into high level week

EU: Huge surplus in the trade of services with the rest of the world

Human health – litmus paper for the climate change?

A rapid deterioration of the humanitarian situation in the war-torn Yemen

Inflation and interest rates indicate urgent need for action

ISIS fighters fleeing Mosul for Syria can topple Assad. Why did the US now decide to uproot them from Iraq?

“There are many converging visions and interests between the One Belt One Road initiative and the Juncker Investment Plan”, Ambassador Yang of the Chinese Mission to EU highlights from Brussels

Italy can stand the US rating agencies’ meaningless degrading

EU Parliament shows its teeth in view of 2014 elections

The EU and North Korea: A Story of Underestimation

A Sting Exclusive: “Digital and mobile technologies are helping to achieve an economic success in Spain”, the Spanish Secretary of State for Telecommunications and Information Society Víctor Calvo-Sotelo reveals to the Sting at Mobile World Congress 2015

How the EU sees its own and Russia’s role in Ukraine

Don’t underestimate the power of the fintech revolution

An overview of the Tobacco Control Measures in India: problems and solutions

Green light for VAT overhaul to simplify system and cut fraud

Trust and support of Iraqis essential for success of UN’s Da’esh terror investigation

DR Congo: Ebola response resumes despite ‘risky environment’

“Hasta la vista” Google says to Spain and now Europe is next?

ILO warns of widespread insecurity in the global labour market

EU to Google: How to dismantle European search engines in 13 steps

The challenges of mental health among the Syrian medical students

A geared turbofan at Pratt & Whitney's production hub in West Palm Beach (copyright: Pratt & Whitney - a UTC Company- 2018; Source: Pratt & Whitney's website, media center)

The EU Commission approves UTC’s acquisition of Rockwell Collins under conditions

EU budget: Making the EU fit for its role as strong global actor

Bankruptcy or referendum: which one is going to be first?

Why do overwhelming proportions of EU’s youth feel excluded?

These are the next big products in consumer technology

Ten UN peacekeepers killed in a terrorist attack in northern Mali

What cryptocurrencies will do to the integrity of politics

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s