Well, I called this from the start. Laffer’s curve is still laughing at these pinheads.
BRUSSELS (Reuters) – The euro zone will not return to growth until 2014 and struggling Spain and France will be among those who miss debt-cutting targets as a result, the European Commission said on Friday.
Paris and Lisbon said they would seek more time from Brussels to reach their deficit goals. Madrid has already indicated the same.
The EU’s executive said the euro zone economy, which generates nearly a fifth of global output, would shrink 0.3 percent in 2013 after a 0.6 percent fall last year, blaming a lack of bank lending and record joblessness for delaying the recovery.
That represented a marked downgrade of the Commission’s prediction from November that the euro zone would grow this year. The euro slipped on the back of the forecasts. …
The main laggard was Spain, which badly missed the 6.3 percent of GDP target for 2012 with a result of 10.2 percent. While that included 3.2 percent of GDP cost to recapitalize banks, even at 7.0 percent the deficit was above target.
This year, Madrid will have a deficit of 6.7 percent rather than the 4.5 percent set for it. And unless policies change, Spain will have a gap of 7.2 percent in 2014 against the target of 2.8, the Commission said…..
Commission forecasts showed Portugal’s headline budget deficit rose to 5.0 percent of GDP last year from 4.4 in 2011 and will only ease to 4.9 percent this year, unless policies are altered.
But Portugal’s GDP is now seen shrinking almost twice as much as previously this year — 1.9 percent instead of 1 percent.
France will also miss its nominal deficit targets – this year’s shortfall will be 3.7 percent rather than the 3.0 percent agreed with the EU, because of the weaker than expected growth.
Would love to add commentary but have to run…..