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Friday, May 31, 2013

The march of eurozone unemployment continues

An unstoppable march? Maybe. The consistent monthly practice of smashing unemployment records in the eurozone continued in April with the overall total reaching 12.2% while youth unemployment hit a whopping 24.4%.

  • As the graph highlights (click to enlarge) youth unemployment has risen a staggering amount in some countries since the start of the crisis (for countries where April data is not yet available the latest month available was used).
  • The problems in Greece are well documented but some very large economies also have some very serious problems with youth unemployment. In April it stood at 56.4% in Spain, 42.5% in Portugal and 40.5% Italy.
  • The longer this goes on the more problems it will cause both economically and socially. It creates a split within society with many young people seeing a very bleak future; traditionally this has also fed populism and the rise of extreme political parties.
  • Economically it hurts the long term productive potential of the economy as some of these young people see their productivity reduced by long stints out of work, while many others will look for work abroad potentially creating a 'brain drain' and worsening an already troubling demographic problems.


Rik said...

And it wil get worse, with the economy in negative territory.
You probably need 1.0-1.5% real growth to stabilise things.
So at least 1% higher same day next year, probably more. With the weakest groups relatively hit the hardest (they always are). Non-Western immigrants and youth probably double that percentage higher. The proposed peanuts programm will hardly change anything.

The economy simply hasnot bottomed out. Even hard to see in many countries, most countries in fact (including France and Belgium), where the bottom is. Simply no situation that consumers (even those with excess spending power) will start to consume more. Same with business, if you havenot got a clue when growth will start again you simply wait with doing things until it is really there.

Rik said...

Probably the pressure at home makes working this way the lesser evil. However this is hardly the way forward if you want to go forward with a substantial reneg and want to end with a set up which is overseeable and logical.

This is about the basics of the organisational set up, it is hard to work on the powers of parliament when some preliminary questions are simply not yet answered or even asked. Like does the UK in the envisaged set up needs an EP?
Imho hard to see if there is any added value in a set up of a freetrade plus zone for a parliament. Almost certainly the rest will want to keep it. But does that mean that the UK will as a consequence thereof have to join (and with limited powers or not) that parliament or should another way be found.

It is of course abloody shame that it takes 2 years to make a proper inventory of the implications of EU legislation on the UK. Most of that work should have been done at the time it was approved by the UK.

This has it in it to become a huge legal mess. As said for the homefront it is probably good that something is done but you have to be very careful.

Rollo said...

Germany, and one or two satellites, are sucking the rest of the Eurozone dry. How? By sharing a currency with feckless states which do not embrace the same work ethic, that do not believe in living within their own budgets and that do not have the geography or infrastructure or the will to be hard working provident societies. As long as they share the currency, the southern end of the Eurozone is doomed to poverty until they suffer insurrection.

Freedom Lover said...

April's EU youth unemployment figures are indeed dire for Spain, Portugal, and Italy. But Greece's is even worse - it was 59.1% in January, & according to some sources is now around 62%. Ireland has just under 31% young unemployed, while France's youth redundancy figures are now above 26%.

What a failure both the EU & the euro-zone are. Especially when each one of these 6 problem countries would, most likely, be back on the mend if they had left the euro-zone as soon as the financial crisis had really hit them. Even now they could go. In fact every day's delay is a wasted day as far as their unemployed youth's prospects are concerned.

Britain's greatest foreign policy mistake of the last 40 years has been to join the ghastly EU. Similarly, for many of the euro-zone countries their greatest foreign policy mistake in the last 15 years has been to join the thoroughly dystopian euro-zone!

Anonymous said...

This was not the mistake the UK Govt.made.
The mistake was in allowing the original concept of a Common Market /Free trade idea to morph into a political dictatorship without doing damn all about it.