UNDERSTANDING THE U.S. FISCAL CLIFF

"Fiscal cliff" is the popular short term used to decsribe the situation the U.S. will face at the end of 2012, when the terms of the Budget Control Act of 2011 are scheduled to go into effect.

World Economic Outlook Projections 2013

The World Economic Outlook Report was released at the IMF's annual meeting in Tokyo on 8 October 2012. The world economy is expected to grow 3.6% next year. Here below are the 2013 projections by major countries:

Global Economic Outlook Worsening and Real Option

Five years after the Great Financial Crisis of 2007-2009 began, there is still no sign of  a full recovery of the world economy. Consequently, concern has increasingly shifted from financial crisis and recession to slow growth or stagnation, causing some to dub the current era the GREAT STAGNATION. Indeed, the global economy has entered a dangerous and uncertain phase. According to the IMF, global growth in advanced economies is too weak to bring down unemployment and what little momentum exists is coming primarily from central banks.

BAD LOBBYING AND GREEK FORMULA 1

Greece is broke, under a mountain of debt, on the verge of collapse, being kept afloat by European loans and yet, it is moving forward with plans to construct a € 94.6 million Formula 1 race track. The Greek government will subsidize one-third of the construction costs equivalent to € 30 million.

LOBBYING AGAINST THE EUROPEAN FRACTURE

Everything the EU does to foster unity seems to only further infighting, divisive rethoric and finger-pointing. There is squabbling over bailouts, multicultural woes, bloody protests and even serious discussions about member states exiting the eurozone etc. Europe appears to be fracturing under the weight of each bailout.

FREEDOM OF EXPRESSION AND BLASPHEMY

When French satirical weekly CharlieHebdo is publishing caricatures of Prophet Mohammed naked it is NOT defending the freedom of the press. It is an act of blasphemy. Blasphemy is the act of showing contempt or speaking offensively about a deity or of persons and symbols regarded as sacred by the followers of a specific religion.

AUSTERITY IS MAKING EUROPE'S CRISIS WORSE

Austerity measures that are implemented to reduce deficits does not revive struggling economies. How is a shrinking or stagnant economy supposed to grow when the people actually trying to survive in that economy are being punished with further economic hardship? What drives economic growth is demand but the austerity measures suppress demand and structural reform focuses too much on supply. Austerity measures are self-defeating, because if output continues to contract, deficit and debt ratios will continue to rise to unsustainable levels.

THE SWEDISH CENTER RIGHT APPROACH IS A BOWL OF FRESH AIR

Despite headwinds from the Eurozone, Sweden's track record of sound monetary, fiscal management and high level of national savings leaves it well placed to cope with increased macroeconomic risks. The country's public finances are among the strongest in Europe, which provides scope for boosting investment to create more jobs in growing enterprises, while policies aimed at reducing exclusion and creating more paths into jobs for people who are far removed from the labour market will continue.

ANEMIC RECOVERY FORECAST FOR THE EUROZONE IN 2013

The disparity between the Eurozone's north and south poles has widened and growth in 2013 will be inconsistent. Some countries will show some growth in 2013, but the periphery countries will continue to show negative growth rates.

Positive GDP Growth Forecast 2013

  • Estonia: 3.5%
  • Luxembourg: 2.4%
  • Slovakia: 2.1%
  • Malta: 1.9%
  • Germany, Finland: 1.4%
  • Austria: 1.3%
  • Slovenia: 1.1%
  • Netherlands: 1.0%

Below 1%

NEW STRATEGY NEEDED TO TACKLE EUROPE'S JOB CRISIS

We are now in the fifth year of the economic crisis and there is little indication of any improvement. Joblessness has reached record levels and the outlook is one of stagnation.

In July 2012, the Euro Area seasonally-adjusted unemployment rate was 11.3% and the EU 27 it stood at 10.4%. There are 25 million men and women in the EU 27 without a job. More than 5 million are young people. 25 million is equivalent to the total population of Denmark+ Estonia+ Latvia+ Lithuania+ Ireland+ Slovenia+Slovakia+Cyprus+Luxembourg.

13 Members Below 10% Unemployment

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