By Nikos Nikolaou

The European Commission, Germany, France and Britain and other European Union members have revised their 2008 inflation forecasts upward and are now projecting lower growth.

Last spring, the EU saw 2008 growth for the eurozone at 2.6 percent. In autumn, the forecast was trimmed to 2.1 percent, while the latest projection, presented by Economic and Monetary Affairs Commissioner Joaquin Almunia, put it at 1.7 percent for 2008 and down to 1.5 percent for next year.

What a meltdown. Meanwhile inflation, which stood at 2.1 percent last year, skyrocketed to 3.2 percent in March.

In fact things might get even worse, as Almunia warned of a “very strong inflationary shock.” Given that Europe’s financial woes originate from the US credit crisis, it’s interesting to see how opposition parties in eurozone states have reacted to the news. In politically polarized Greece, the opposition said the Almunia report demonstrated the failure of the government’s economic policy. What PASOK officials are saying in effect is that if they were in power the country would escape the global crisis, unscathed behind the safety of socialist walls. But those bad conservatives opened the castle gates.

One was hoping that PASOK would renounce its populist posturing and 1980s-style tactics. When other opposition parties in Europe speak of the need for structural reform, the main opposition here wants OTE telecom to remain in the hands of the unionists and contractors who have exploited the organization for decades; it objects to the privatization of operations at the ports of Athens and Thessaloniki; and it opposes PPC’s construction of new coal-powered plants that will put an end to costly imports from abroad.

In short, it wants to close the door on foreign investors and isolate Greece from the international community.