Broken record: France to miss deficit-reduction targets because of “weaker than expected” economic growth

posted at 8:41 pm on September 11, 2013 by Erika Johnsen

I’ve been seeing a lot of headlines lately about how Europe’s recent small and patchy improvements in economic growth and consumer confidence are signs that the eurozone has at last succeeded in riding out the worst consequences of their collective debt crisis and is finally entering a period of recovery. For instance:

Europe must move ahead on its banking union project to help the region exit an economic and debt crisis whose end is now “within sight,” the European Union’s top official said Wednesday.

In his annual address to the European Parliament, European Commission President Jose Manuel Barroso said the region has “started to convince” financial markets and Europe’s partners that it is turning its back on a crisis that has seen five countries seek a bailout and produced a long, protracted downturn.

“Of course we need to be vigilant…Even one fine quarter doesn’t mean we are out of the economic heavy weather. But it does prove we are on the right track,” he said.

Hmm. While it may be true that certain economic and financial factors are stabilizing, at least for the moment, that sounds a lot more like complacent optimism than it does an honest assessment of Europe’s prospects and goals. I wouldn’t exactly categorize widespread unemployment and multiple countries’ uncontained debt trajectories as being on the “right track”:

“Europe, it seems, has become anaesthetised to bad news,” says Simon Tilford from the Centre for European Reform. Tentative signs of life after six quarters of contraction are deemed a vindication of shock therapy, even as the underlying crisis gets worse in almost every key respect.

“The reality is that the Spanish and Italian economies will shrink by a further 2pc in 2013. Greece is on course to contract by an additional 5pc to 7pc and Portugal by 3pc to 4pc. Far from being on the mend, the economic crisis across the South is deepening. Real interest rates are increasing from already high levels,” he said. …

Mr Tilford says the elephant in the room is the rise in the debts of Portugal and Spain by 15 percentage points (pp) of GDP over the past year, by 18pp in Ireland and by 24pp in Greece. Italy’s ratio rose 7pp to 130pc of GDP, already at or near the point of no return.

And of course, it isn’t just Greece, Portugal, and etcetera with crushing debt problems. The bulk of the eurozone’s few tenths of a percent of economic growth in the second quarter largely rested upon the contributions of Germany’s 0.7 percent growth rate and France’s 05 percent rate — but France is yet again blithely revising the extent of their compliance with the deficit-reduction targets by which they promised Brussels they would abide. They’re supposed to be keeping their public spending below three percent of GPD, but obviously, that’s not happening. Via the WSJ:

France’s government said Wednesday it will miss its deficit targets this year and next due to a weaker-than-expected economic recovery.

Finance Minister Pierre Moscovici said at a news conference that the public budget deficit will be 4.1% of economic output this year instead of 3.7%, and 3.6% in 2014 rather than 2.9%.

Mr. Moscovici said the new deficit targets will help economic growth by not inflicting austerity on the economy, which the government forecasts will grow only 0.1% this year. He said growth will accelerate to 0.9% next year, while the government was previously banking on 1.2%.

Really? Economic growth was unexpectedly weaker than you thought it would be, after effectively raising the country’s total 2013 tax pressures to a historical high of over 46 percent (which included raising the country’s top marginal income tax rate to one hundred percent)? I just can’t imagine why that didn’t work.


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Don’t forget the welfare muzzies invading France, breeding like rats and spending their days in mosques.

Go to Paris, learn to speak Arabic.

patman77 on September 11, 2013 at 8:48 PM

…if JugEars had a white brother!

KOOLAID2 on September 11, 2013 at 8:49 PM

That photo has been banned. I’m reporting you to the International Goofy Looking Leftist Leader Stupid Photo Enforcement Commission.

BobMbx on September 11, 2013 at 9:03 PM

How do you say oops! in French?

workingclass artist on September 11, 2013 at 9:09 PM

Coming soon to a country near you …

ShainS on September 11, 2013 at 9:12 PM

“Unexpected” is the new buzzword in progressive circles.

Weak economies are “unexpected” when progtressives get to set all the economic policies. (Consisting mainly of the 1972 Democratic Convention floor chant of “SO-SHAL-ISM NOW! SO-SHAL-ISM FOREVER!”)

The foundering of Obama Care even in advance of its launch is “unexpected”. (Translation; “We do social engineering, we don’t do math. Math hates us.”)

Even the recall of the two Colorado state senators was “unexpected”. (“Why can’t you see we mean to oppress you for your own good, you f**king peons??“)

Why this is all “unexpected” is that progressives are absolutely sure that they are Always Right About Everything. That is the nature of a cult.

When reality has a different opinion, they cannot accept it. The usual result is doing the same thing over again, with more money thrown at it, and more Draconian laws passed to enforce it. (“It is now only legal to make silk purses from sows’ ears.”)

If reality continues to refuse to submit, they generally “progress” from rhetorical bloodshed… to the real thing.

“If you continue to refuse to let us make you and the world perfect- we’ll just kill you. Your surviving descendants will know better than to disobey us.”

Aka The Nomad Syndrome.

clear ether

eon

eon on September 11, 2013 at 9:13 PM

eon on September 11, 2013 at 9:13 PM

…ha!…you are good!

KOOLAID2 on September 11, 2013 at 9:17 PM

Some people are just convinced that you can beat the cow into giving more milk.

Nothing ever seems to dissuade them.

Bat Chain Puller on September 11, 2013 at 9:22 PM

Obviously, France needs to come up with more social programs to improve the economy even further.

/

Wino on September 11, 2013 at 9:28 PM

Chercez la deficit

gerrym51 on September 11, 2013 at 9:38 PM

How do you say oops! in French?

workingclass artist on September 11, 2013 at 9:09 PM

O-ba-ma

Subotai Bahadur on September 11, 2013 at 9:42 PM

The French version of an old joke…

The tax increases will continue until the economy improves.

mankai on September 11, 2013 at 9:56 PM

Who could have predicted that electing a Socialist Party candidate as president of France would have been bad for their economy? I mean, besides everybody reading this site?

J.S.K. on September 11, 2013 at 10:39 PM

Hmmmmm……..looks like the socialist are running out of other people’s money. And for them, that means GERMAN money. I really hope the Jug Eared Fool in the White House won’t find a reason to get us involved in that fight.

GarandFan on September 11, 2013 at 10:54 PM

For the good of the order, Eurozone GDP estimates are not annualized, so 0.4% quarter-over-quarter growth does match the US 1.7% annualized quarter-over-quarter growth.

With that said, the last time I checked Eurozone GDP projections, instead of 0.6% contraction over the remainder of 2013, they were looking at 0.4% contraction. PROGRESS!

Steve Eggleston on September 12, 2013 at 8:13 AM

Erika, you stole my line.

However, I won’t charge you royalties.

Anyway…

Wow, who could have seen this coming?

Chris of Rights on September 12, 2013 at 8:50 AM

Do not underestimate the effect of all the regulations that France has in place to strangle their entire economy. Years of socialist control is leading them down the same FAILED path that the USSR took.

Freddy on September 12, 2013 at 12:55 PM