Autumn 2009 Economic Forecasts: is economy in the eye of the storm?
According to the European Commission’s Autumn 2009 forecasts, to be published on 2 November 2009, the economy is overcoming the recession and growth seems to be back on the agenda for the next years. For the European Trade Union Confederation (ETUC), a closer analysis reveals that the economic forces supporting the present recovery are temporary whereas the forces that are dragging down aggregate demand and economic activity are of a more permanent nature.
The ETUC considers that, instead of organising and setting dates for a premature fiscal exit strategy, policy makers should discuss how to maintain and even strengthen the fiscal stimulus strategy. The latter should be done by rolling out the public investment infrastructure that is necessary for the ‘greening’ of the European economy. European economic policy must break with the ‘Brussels Frankfort’ consensus.
Says Reiner Hoffmann, Deputy General Secretary of the ETUC: “The economy is now in the eye of the storm. We have a recession behind us but another downturn may already be in front of us, certainly in terms of massive jobs restructuring. This implies that the European Council’s decision to exit from fiscal stimulus at the latest in 2011 may turn out to be a dramatic mistake”.
Attachment: The ETUC Autumn 2009 Report on the European Economy
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