By now everyone in the developed world knows it: we are living an economic crisis. Still unclear is why a recession, which according to economic specialists is not something completely unusual, is now considered a crisis. Maybe it is just a mass-media gimmick or maybe it is something far worse than a recession. For now the answer will be left opened to debate and the focus will go on what shall we expect in the next few months.

Last week, the Commission of the European Union, the institution responsible for managing the major economic aspects of the world’s largest economic power – the European Union, has released its predictions for 2009. Although the picture is not a cheerful one, it is neither a devastating one.

Here is the official link:

http://ec.europa.eu/economy_finance/thematic_articles/article13727_en.htm

And on short what the Commission predicts:

Nr.

Country

GDP growth 2009

GDP growth 2008

GDP growth 2010

Public Budget 2009 (%GDP) (negative = deficit)

EU

-1.90%

-0.20%

0.50%

-4.50%

1 (18 )

Latvia

-6.90%

-2.30%

2.40%

-6.30%

2 (1)

Ireland

-5.00%

2.00%

0.00%

-11.00%

3 (16)

Estonia

-4.70%

-2.40%

1.20%

-3.20%

4 (20)

Lithuania

-4.00%

3.40%

-2.60%

-3.00%

5 (3)

UK

-2.80%

0.70%

0.20%

-8.80%

6 (9)

Germany

-2.30%

1.30%

0.70%

-2.90%

7 (12)

Italy

-2.00%

-0.60%

0.30%

-3.80%

8 (10)

Spain

-2.00%

1.20%

-0.20%

-6.20%

9 (2)

Netherlands

-2.00%

1.90%

0.20%

-1.40%

10 (4)

Belgium

-1.90%

1.30%

0.30%

-3.00%

11 (8 )

France

-1.80%

0.70%

0.40%

-5.40%

12 (5)

Portugal

-1.60%

0.20%

-0.20%

-4.60%

13 (14)

Hungary

-1.60%

0.90%

1.00%

-2.80%

14 (11)

Sweden

-1.40%

0.50%

1.20%

-1.30%

15 (6)

Austria

-1.20%

1.70%

0.60%

-3.00%

16 (13)

Finland

-1.20%

1.50%

1.20%

2.00%

17 (7)

Denmark

-1.00%

-0.60%

0.60%

-0.30%

18 (-)

Luxembourg

-0.90%

1.00%

1.40%

0.40%

19 (15)

Greece

0.20%

2.90%

0.70%

-3.70%

20 (17)

Slovenia

0.60%

4.00%

2.30%

-3.20%

21 (-)

Malta

0.70%

2.10%

1.30%

2.60%

22 (19)

Cyprus

1.10%

3.60%

2.00%

-0.60%

23 (22)

Czech Rep.

1.70%

4.20%

2.30%

-2.50%

24 (25)

Romania

1.80%

7.80%

2.50%

-7.50%

25 (24)

Bulgaria

1.80%

6.40%

2.50%

2.00%

26 (23)

Poland

2.00%

5.00%

2.40%

-3.60%

27 (21)

Slovakia

2.70%

7.10%

3.10%

-2.80%

It looks like EU will not be doing very well, especially in 2009 when there will be a general recession in almost all EU countries. It is noticeable how optimistically the Commission has predicted 2010 with an already recovering EU economy, right now the economic future of the western developed countries is quite gloomy and any predictions beyond 2009 may just be hard to be taken in consideration. Also we must take notice that most of the EU countries try as much as possible to stick to their commitment for not running a to big budget deficit, most trying to remain around 3%. This is a considerably small deficit in times of recession and it is unclear if this will prove helpful in the end.

What can we do?

Most of us wrongly believe that the economy is something impersonal and beyond our control, most of us believe that all we have to do is tighten our belts and wait for the recession to pass. However this is a wrong way of seeing things. The economy we live in, is our economy, is made by us, by our transactions, our work and our ideas, it is not a force of nature or God. We build our economies with our own hands and minds and becoming passive, just waiting for the recession to pass, will not improve things.

It is like living in a house together. The roof has broken and now we all wait for someone or for some way to have it fixed so we can get back to our daily business. Unfortunately the only way to fix the roof is for us to get working on it and stop staring at it. So try to do something, if there are no more jobs try working on your own or with your friends, try ideas that you think might work, be inventive. A recession is not the end of the world.

Remarks:

As a note to my previous article on the economic crisi: “Which countries will be worse hit by the current economic crisis?”. I compared the predictions of the EU Commission with the ones made in the article above. The average difference between the Commissions’s ranking and my ranking was 5 which is not very promising for my predictions. However, when broken down, out of the 27 countries, 4 I got completely wrong, 5 close but not close enough and 18 almost entirely right. I would say that this means that in most cases my predictions were correct. Also it seems that they work very well for big countries with populations above 20 million while for those below they usually tend to unreliable.