‘Cause I don’t. Commissioner Rehn announces on Sunday that he ‘strongly’ supports the Government’s National Recovery Plan. He even said:
Implementing the plan will offer a “sound basis for stable, job-creating growth.”
Then, on Monday, he announces he doesn’t believe the growth rates contained in the Plan. In fact, he so disbelieved them that the EU Commission tacked on another year to the Maastricht target. Question: how can you strongly support a plan when you so strongly disbelieve the projections that underpin them?
And I mean strongly. Here are some comparisons between the National Recovery Plan’s projections and the ones that Rehn’s department came out with the day after IMF/EU bail-out deal was signed. These cover the two-year period 2011 and 2012.
- GDP: Government: 5 percent. EU: 2.8 percent. The EU is projecting a growth rate at nearly half the Government’s forecast.
- GNP: Government: 3.5 percent. EU: 0 percent. Yes, that’s right – 0 growth estimate in the domestic economy. The EU is actually measuring GNI which is the GNP plus transfers from the EU. Take away those transfers, and the GNP under the EU’s forecast goes negative.
- Consumer Spending: Government: 1 percent. EU: -2.8 percent. That’s quite a turnaround.
- Investment: Government: -0.7 percent. EU -10 percent. The Government is hoping for a rebound of 5.2 percent in 2012. The EU says investment will flat-line at 0 percent. Tomorrow has been postponed.
- Employment: Government: increase of 18,500. EU: decrease of 4,000. The EU projects employment creation will be half of the Government’s target in 2012.
The immediate issue here is not who is right and who is wrong. Projections will change every quarter – though in Ireland’s case of late they seem to be changing for the worse.
The issue here is how one can strongly believe in a plan when one strongly disagrees with what the plan will do.
All explanations are welcome.