Human-rights activists risking their lives to bring democracy to authoritarian countries found themselves snubbed Friday. The Nobel Committee somehow decided the European Union was more deserving of the Peace Prize.
That must come as a bit of a shock to the man on the street in Athens, Lisbon, Madrid, Paris or Rome where economic circumstances are anything but peaceful. The International Monetary Fund (IMF) predicts the region will remain in recession for the year as the continent’s economic slowdown drags on.
The rest of the world isn’t going to fare much better, according to the IMF’s latest World Economic Outlook report. The global economy is expected to grow at about 2 percent in 2013, which is sharply down from 4 percent last year. Even the meager 2 percent is likely to prove optimistic since much of this growth is expected to happen in the United States, where the situation isn’t improving. Japan will likely remain mired in stagnation as it struggles to deal with public debt hitting almost 250 percent of gross domestic product — worse even than the 180 percent burden of Greece.
Brazil, Russia, India, China and South Africa are supposed to be the new economic powerhouses, but they’re also sliding. China is headed for a drop in growth to under 8 percent from annual highs of beyond 10 percent in recent years. India is also expected to perform worse with 5 percent growth that’s substantially below robust figures it’s enjoyed of late. The IMF projected worldwide fiscal deficits would land at just under 6 percent, with any reductions coming primarily from increasing taxes, not cutting spending.
The IMF is leading the charge on this choice by calling for less austerity and looser monetary policy. For instance in Spain, the fiscal situation is so disastrous that Zambian bonds carry lower interest rates than those issued by Madrid. On Wednesday, Standard and Poor’s downgraded Spain’s credit rating to one step above junk. If the other agencies follow suit, Spain’s borrowing costs are likely to rise even further. There’s no sign of the country adopting pro-growth policies because its politicians only know how to raise taxes.
France’s socialist President Francois Hollande is following the Spanish steps, seeking punitive taxes on the “wealthy.” Entrepreneurs, unsurprisingly, are responding to this persecution by flying to more hospitable climes. Pushing the most innovative people out isn’t going to get a nation back on a growth path. Mr. Hollande has shown no desire to trim the massive welfare state that has become such an enormous burden on the productive sector.
At least the Eurocrats can now claim one more thing in common with President Obama, the undeserving 2009 recipient of the Nobel Peace Prize. Both refuse to get serious about the urgent need to reform their bloated governmental expenditures. Both are looking at continued high unemployment levels and economic stagnation. Both need to reverse course before they drag down the entire global economy.
The Washington Times