Mon Jul 2, 2012, 02:43 PM
alp227 (20,431 posts)
Eurozone unemployment hits record high
Source: Financial Times
The European Central Bank is widely expected to make an interest rate cut this week to try to invigorate the eurozone’s ailing economy after unemployment in the region climbed to a record high and a key survey of manufacturing showed the sector to be at its weakest in three years.
Joblessness in the eurozone reached 11.1 per cent in May, the highest in the history of the single currency, the EU’s statistics office said on Monday. The rate climbed in Spain, where almost one in four people is out of a job, and edged higher in France, where President François Hollande’s government is this week to set out key parts of its policies to boost growth and cut the budget deficit.
Across the eurozone the number of unemployed rose by more than 1.8m in the past year. Unemployment among those aged under 25 is more than 52 per cent in Spain and Greece.
Read more: http://liveweb.archive.org/http://www.ft.com/cms/s/0/0caececc-c425-11e1-850c-00144feabdc0.html
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Eurozone unemployment hits record high (Original post)
Response to nxylas (Reply #1)
Mon Jul 2, 2012, 06:32 PM
Igel (17,557 posts)
5. It's a problem.
Earlier they were the model against which (R) austerity in the US was compared and found wanting. Germany buoyed up Europe, and all was well.
Then all hell broke loose because there was the matter of debt payments, potential defaults, and increasing interest rates for government borrowing. "Growth" is a good thing, but when it meansbasically "borrowing" then the limits and constraints are a bit more obvious.
Hollande's proposals should be interesting: Growth while cutting the deficit. Hmmm ... that would almost certainly mean tax increase. You can't increase spending while reducing the deficit by any other saner means. There's always just increasing the money supply or cranking up tariffs. I don't know that France has the sovereignty left for that.
Now, in 1937 there was a bit of a downturn. Most people left of center say it was "austerity" that caused it, since, well, there was a budget cut. A withdrawal of Keynesian stimulus. But the same time there was a hefty tax increase--Laffer-curve enthusiasts see only that while pointing out that "austerity" was a return to budget levels from 2 years before, the removal of a bubble not large enough to have accounted for the increase in growth without a huge multiplier effect.
Then again, there were a series of monetary restrictions that took hold--increased bank reserve requirements that would have reduced liquidity as well as restricting gold transfers in order to reduce global exposure. Reduced liquidity is also held, by monetarists, to be tied to recession. In this, as in Europe and the US, we tend to see what we want to see. So the US is practicing austerity--with a $1.3 trillion deficit or greater for each of the last 4 budget years. Meaning, in other words, over $4 trillion in additional "stimulus" over that period of time than under *.
Economics, IMHO, is at the state physics was in perhaps 1630.