Ambassador Bruton Warns against Effects of Escalating Public Debt

Speaking at the European Institute in Washington, DC, today, Ambassador John Bruton, Head of the European Commission Delegation to the United States, warned that escalating public debt in Europe and the United States could hinder the ability to tackle challenges ranging from climate change to healthcare.

Noting estimates that the US public debt could reach 150% of GDP by 2030 – and that the number could be even higher for some European countries – Ambassador Bruton said, “Those levels of indebtedness would increase vulnerability of the EU Member States and the United States to international interest rate fluctuations, and they would reduce very significantly the resources that we could set aside for military, naval and homeland security activity, as well as for vital social and educational services.”

Pointing out that “politics is about more than the next election; it is about the next generation,” Ambassador Bruton said there is a need to get serious about long-term issues and realize that major problems have to be dealt with simultaneously as they are all interconnected.

“My hope, as I leave my post here after five wonderful years, is that, on both sides of the Atlantic, the positive, the foresightful, the courageous and the problem-solving forces in politics will overwhelm the forces of postponement, partisanship, point scoring and intellectual paralysis,” he said.

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EU Forecasts Economy to Shrink by 4% in 2009

Today the European Commission lowered its forecast for growth in the European Union this year, projecting that EU GDP would fall by four percent before broadly stabilizing in 2010.

“The European economy is in the midst of its deepest and most widespread recession in the post-war era,” said Joaquín Almunia, EU Commissioner for Economic and Monetary Affairs. “But the ambitious measures taken by governments and central banks in these exceptional circumstances are expected to put a floor under the fall in economic activity this year and enable a recovery next year. For this to happen we need to proceed rapidly with the cleaning up of the ‘impaired assets’ on bank balance sheets and to re-capitalize banks when appropriate.”

The European Commission’s forecasts also showed that the unemployment rate is expected to increase to 11 percent in the EU in 2010. The public deficit is projected to rise sharply to 7.25 percent of GDP in 2010, reflecting both the slowdown and the discretionary measures taken to support the economy.

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Preventable Job Cuts

Economy: No one has pleaded as earnestly for Congress to pass a Colombia free-trade pact as Caterpillar. Now, with earnings down and 20,000 American jobs to be lost, it’s obvious why. Trade would have cushioned this blow (Investor’s Business Daily, January 26, 2009). Read Full Article

America for Sale

American companies are on sale. Foreign buyers are circling, taking advantage of a weak U.S. dollar and a depressed stock market to snap up U.S. companies at discounted prices. Click on the linkfor complete article