The expert economists think Germany is being punished for its failure to stimulate:
Germany’s economy shrank by 3.8pc in the first three months of the year – a record contraction that is almost double the fall of Britain’s gross domestic product in the first quarter. The figures sparked attacks on Germany’s government, which has repeatedly shown reluctance to bail out either its economy or financial system. In figures described by economists as “disastrous”, Eurostat also reported that Italy shrank by 2.4pc, Austria and the Netherlands by 2.8pc, Spain by 1.8pc and France by 1.2pc. The statistics underline the fact that although Britain’s financial system was badly hit in the early months of the crisis, the UK’s economy has not fared as badly as its continental rivals, contracting by 1.9pc in the first quarter….
Economists said that the country’s reluctance to move quickly to cut taxes and raise spending was largely to blame.
Now, let’s take a little look at what the experts very recently said was taking place in the Eurozone.
-1.3 percent: Q4-2008 Expected
-1.5 percent: Q4-2008 Actual
-1.6 percent: Q4-2008 Revised
-2.0 percent: Q1-2009 Expected
-2.5 percent: Q1-2009 Actual
-0.6 percent: Q2-2009 Expected
Keep in mind that the Europeans report their numbers on a quarter-by-quarter basis rather than an annual one, so that 3.8 percent contraction in Germany is what would be reported in the USA as a -6.9 percent annual growth rate. In other words, being off by half a percent is actually a larger error than it looks. Based on what I’ve heard, Q2 will end up being worse than Q1, which leads one to wonder: if the experts can’t even tell if things are improving or getting substantially worse, why should political leaders follow their policy prescriptions?