Austerity in Europe? Ok, table below shows General Government expenditure as % of nominal GDP in 2011-2012 compared to 2000-2007 average.
Chart below shows nominal values of General Government expenditure, in billions of euros.
Chart above clearly shows that during the entire crisis, euro area General Government Expenditure dipped only once - in 2011 compared to 2010. The 'savage' cut was €13.02bn for EA12 combined, or 0.14% of 2011 GDP. Continuing with 'savage austerity', 2012 is forecast by the IMF to post General Government Expenditure increase of €43 billion for EA12 and €43.9 billion for EA17. By the end of 2012, under 'severe austerity', euro area Governments will be spending €30 billion more than in 2010.
Things get even worse under the 'savage cuts' of 2013. In 2013, EA12 governments will be spending €66.2 billion more than in 2012 and €96.2 billion more than in 2010.
Oh, yes, and the trend continues into 2017 projections by the IMF.
In family analogy, 'Darling, with one of our jobs lost, try not to buy a fancier Gucci bag, next time you go out for groceries!'
Is it really "try not to buy a Gucci bag"?
ReplyDeleteIf you look at Ireland, between 2006 and 2011 current expenditure went up every year. But if you subtract money going to Social Protection (which includes increases in welfare payments) and money spent on servicing our debt, the rest of current expenditure dropped in 2009 and 2010. (I'd look at 2011, but the White Paper for 2012 didn't include a breakdown of 2011 spending that is readily comparable).
http://3milelimit.files.wordpress.com/2012/05/irish-expenditure-thousands-euro.jpg
So it might be, "buy cheaper groceries darling, we need money for the kids and the credit card debt has us crippled"? Are there any euro expenditure figures where unemployment payments are omitted?
There are two points worth making:
ReplyDelete1) The first measure, Gov spending as a % of GDP, was always going to increase as GDP decreased since the crisis
2) Government spending since the crisis was always going to increase to take into account the increase in social welfare recipients, bailing out banks etc. - Think of Irish Government spending on things like feckin Anglo