Friday, 7 September 2012

OECD's politically infused "Interim Economic Assessment"

In its latest "Interim Economic Assessment" by the OECD, its chief economist Pier Carlo Padoan (or chief political spin doctor) says,
  • Alongside the "Compact for Growth and Jobs", take decisive action at EU level to deepen the Single Market
  • It is critical that the ECB can go ahead with bond market interventions in line with its August guidance
  • This is a necessary step towards lasting crisis resolution
  • The banks need to be strengthened, alongside creation of banking union
  • Fiscal consolidation in Europe should continue
In general, his forecast for the near-term global economic outlook is bleak.

Now, the OECD's mission is to "promote policies that will improve the economic and social well-being of people around the world". If that is indeed the case, an objective chief economist should present alternative solutions to the EMU problems other than further integration, such as breaking up the whole thing. Mr Padoan's presentation is nothing more than a politically infused presentation and scare mongering (the situation is so bad requiring further fiscal consolidation), dressed up as an economic assessment, spurring the EMU members into further submission in line with ECB's statement (also see here).

Conclusion: don't look to the OECD for independent and pragmatic economic forecasts and solutions, certainly not for Europe.

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