UKIP East Midlands
So much for the 'benefits' of the euro
Friday, 23rd January 2009
The euro zone has gone into recession for the first time since the single currency was introduced 10 years ago, the European Commission has admitted.
After a "catastrophic" fourth-quarter decline of 1.5% in gross domestic product, the economy of the 16 countries sharing the euro will shrink 1.9% in 2009, Brussels now says. As recently as November the Commission was estimating growth of 0.1%, while last month the European Central bank forecast a contraction of just 0.5%.
"Every time the Commission announces its economic forecasts it seems to be back-pedalling from a previous claim," commented UKIP MEP and economics spokesman Godfrey Bloom, adding that he believes even the current prediction is "excessively optimistic".
Mr Bloom added: "Estimating growth is always difficult short or long term, however the EU record is pretty dismal. Even a broken clock is right twice a day. So far, correct forecasts they have made are zero.
"What is more worrying is their failure to understand basic economics. As Winston Churchill aptly put it, a government trying to tax and spend its way out of trouble is like a man trying to lift himself up by the handle of a bucket in which he is standing.
"While the figures the UK are hardly anything to go by, the ongoing and regular fantasy figures produced by the Commission are a running joke in the markets."
Unemployment in the EU is forecast to rise to 9.3% in 2009, up from 7.5% last year, the Commission said. The budget deficit will probably swell to 4% and reach 4.4% in 2010. In 2008 it was 1.7%.
