Spring cleaning

The EU has today released its spring forecast, which updates last autumn’s economic forecasts for EU (and related) countries.

Despite our (relatively) chirpy title it’s far from happy reading.

The EU now expects Greek debt to reach 157.7% of GDP in 2011 and 166.1% in 2012. We can’t help but think that this backs up our (and many others') claim that the bailout has been a complete failure in Greece (combine this with talk of a second bailout only a year after the first and they’re almost making our point for us).

It’s not just Greece either. Irish debt is expected to reach 112% this year and 117.9% next. While Portugal’s debt is forecast to hit 101.7% by the end of the year and go on to 107.4% in 2012. Only a few months ago Portugal’s debt was expected to be around 82% this year, that’s a whopping 20% increase in only a few months!

All in all the figures and the report make fairly grim reading. Over the past year we have seen these sets of figures continuously revised upwards, yet the EU and the ECB continue to maintain that the adjustment programmes they’ve laid out for these countries are achievable and are having a substantial impact.

We think it’s about time the EU started accepting the reality of its own figures and added a debt restructuring to its tools for cleaning up the eurozone debt crisis this spring.