Why are so many out of work in Euroland?

Yesterday’s unemployment figures from Euroland made more depressing reading. 19.24 million people are out of work in the Euro area. The unemployment rate of 12.1% is much higher than the US at 7% and the UK at 7.4%. Non EU countries in Europe have lower rates, with Norway at 3.3% and Iceland post crisis at 5.4%.

Within the zone Greek unemployment at 27.4% and Spanish at 21.7% are particularly bad. Germany remains competitive both within the zone and outside and has much lower unemployment. The totals are up 452,000 on a year earlier, and up a little on the previous month.

Worse still is the position of young people under the age of 25. 3.57 million are out of work in the Euro area. The rate of young person unemployment is a shocking 57.4% in Spain, 54.8% in Greece, 41.6% in Italy and 36.5% in Portugal. Even in France one in four young people are out of work.

Unemployment in the rest of the EU is lower than in the Eurozone, which suggests that some of the high level of unemployment is down to the features of the Euro. Unemployment is however, quite high throughout the EU on average indicating that all is not well with the policies pursued by the region. High regulatory costs and dear energy are two of the features that limit economic progress.

The odd thing is the apparent acquiescence of so many voters so far in this dreadful situation, and the complacency of the European establishment faced with this tragedy. It is extraordinary that over half of all young people under the age of 25 can be out of work in some countries, yet no major action is triggered likely to make a bid dent in the totals of the young unemployed.

The European countries that have stayed outside the Euro, and the USA that also experienced a banking crisis, have used monetary and exchange rate policy to get more people back to work and to stimulate more activity. The Euro was saved from break up by the European Central Bank’s decision to lend large sums to the troubled Euro banking system, and more recently has been helped a little by ultra low interest rates. The endless delays in coming to a judgement about who will pay the bills and who will back the overstretched sovereign and banking borrowers is delaying a vigrous recovery, and is ensuring more young people remain out of work for longer.

This entry was posted in Uncategorized. Bookmark the permalink. Both comments and trackbacks are currently closed.

133 Comments

  1. Arschloch
    Posted January 9, 2014 at 6:41 am | Permalink

    The south European kids do not riot because they can come to the UK to work or live on benefits. Though its interesting to ask why does Boris need some water cannons this summer? The answer to your question with regard to Greece. Spain and Portugal is that they did not become liberal democracies until the mid 70s with corporatist economies in place beforehand, funnily enough its a direction that we seem to be heading in. Why are you not looking at the UKs dreadful youth unemployment rate in direct comparison with say Germany’s? What are the Germans getting right that we are not? Its probably something to do with debt for a near worthless “degree” versus an apprenticeship with a proper job at the end of it of it.

    • peter davies
      Posted January 9, 2014 at 9:29 pm | Permalink

      Apprenticeships – knocked it on the head there.

      • alan jutson
        Posted January 10, 2014 at 10:12 am | Permalink

        peter

        Agreed

        Proper apprenticeships YES!

        What they pass off as an apprenticeship now NO !

        • Mike Wilson
          Posted January 10, 2014 at 10:55 am | Permalink

          I recall lads working for 4 years to gain a skill they actually learned in a few months – but, of course, a lot of tea making and fetching tools had to be built in to the 4 year term.

          • ian wragg
            Posted January 10, 2014 at 12:29 pm | Permalink

            I trained to build, operate and maintain gas turbines. At 68 I’m still learning.

          • alan jutson
            Posted January 11, 2014 at 12:06 pm | Permalink

            Mike

            “Plenty of time tea making”

            Not with a proper apprenticeship, which included day release to go to tech college and night school (remember that, going to school at night for 8 years) whilst you worked during the day !

            First year in the apprentice school, then
            3 months at a time in a range of departments,welding, maintainance, drawing office, toolmaking, milling, grinding, electro plating department, press shop, auto shop, lorry/coach building, demonstration ground, printroom, research and development department, production lines, paint shop.
            Then some management experience looking after 1st year apprentices for a period in your last year.

            Thus you completed your time, knowing more than just your specialist part in the manufacturing process, and learnt how one action/process, related to another.

            Company also offered the facility to continue with day release studies for 4 years after apprenticeship was completed, as long as you progressed and continued to pass examinations.

            Burger flipping type apprenticeships whilst a worthwhile job, has no comparison to the above.

  2. Lifelogic
    Posted January 9, 2014 at 6:42 am | Permalink

    What a criminal waste of valuable labour resources and young people’s futures. It often blytes peoples’ careers for the rest of their lives, causes suicides, depression and huge & entirely pointless harm. The EU having largely killed residual democracy has rendered the peoples in many EURO areas largely unable to do anything about it.

    The solutions are all obvious, allow a return to individual currencies that can then reflect the market realities (rather than the ideology of the EU’s criminally idiotic plan). Then get rid of the vast army of bureaucrat parasites, lawyers, HR experts, high taxes, tax experts, expensive energy, daft employment laws and the endless daft regulations that largely prevent EU based industrial activities from competing internationally.

    Are Michael Gove and David Cameron really supporting Tim Yeo, if so it is surely the final indication that they lack even a half working compass? etc ed

    • uanime5
      Posted January 9, 2014 at 9:55 pm | Permalink

      The solutions are all obvious, allow a return to individual currencies that can then reflect the market realities (rather than the ideology of the EU’s criminally idiotic plan).

      What happens if the eurozone countries don’t want this to happen because high levels of devaluation will ruin their economy and prevent them borrowing?

      • Mark B
        Posted January 10, 2014 at 2:48 pm | Permalink

        You allow them the choice of a referendum. If they choose to stay so be it, if not they can leave, their choice. You do not however need to be in the EU to use the Single Currency as Monaco, Andorra, San Marino and The Vatican City have shown. You can also peg you currency to the Euro as Switzerland does.

      • Posted January 11, 2014 at 6:25 am | Permalink

        Uanime5,

        If Greece were to leave the Euro the new currency would have a lower value. This would fix up the trade imbalance very quickly. That’s what happened in Iceland after 2008. Its currency dropped in value by about 40%. The £ too went down in value by about 20%. It’s much better for everyone that the currency should find its own value than be kept artificially high.
        Britain had lots of trouble trying to do that in the 60’s then later when the IMF were called in the 70’s. Margaret Thatcher’s government, initially, didn’t make the same mistake and let the pound fall to around parity with the dollar in 1982. It recovered and hardly anyone remembers that now. Then there was the attempt to shadow the DM in the late 80’s and early 90’s. That was a bad mistake. That’s not been forgotten.
        So , yes currencies fall, and then recover. It doesn’t mean you can’t borrow money. That’s only a problem if you try to borrow in a foreign currency to support an exchange rate that is already too high. The speculators think that’s a crazy thing to do. They make their money by being right about that.

      • John Armour
        Posted January 13, 2014 at 10:21 am | Permalink

        What happens if the eurozone countries don’t want this to happen because high levels of devaluation will ruin their economy and prevent them borrowing?

        If you “own” your own currency you don’t have to borrow.

    • Posted January 10, 2014 at 7:04 am | Permalink

      What a criminal waste of valuable labour resources and young people’s futures. It often blytes peoples’ careers for the rest of their lives, causes suicides, depression and huge & entirely pointless harm. …………….. allow a return to individual currencies that can then reflect the market realities

      Yes, very good. Unemployment should be recognised as the #1 social evil.

      I’d add that it blights society too. The long term unemployed can in no way be regarded as a reserve army of labour which could be argued would keep inflation in check . That only works in the short term. In the longer term unemployment helps create widespread despair and a dangerous underclass which have become the unemployable.

  3. Andyvan
    Posted January 9, 2014 at 7:23 am | Permalink

    The reasons for such high levels of unemployment are easy to see for anyone not blinded by socialist dogma. Bloated governments interfering in labour markets with minimum wages, gross over taxation, punitive dismissal regulations and the ridiculous single currency.
    Almost every single economic problem is caused by government which then claims that only it can solve the problems, usually by more interference. Boom and bust is the only policy that the state can provide and will ever provide.

    • Posted January 9, 2014 at 12:48 pm | Permalink

      Taxation and minimum wage levels relative to average wage levels are not much different as between the Euro core and Euro periphery. So tax and min wages don’t explain the catastrophically high unemployment levels in the periphery.

      • Posted January 10, 2014 at 12:41 am | Permalink

        Ralph,

        Yes – what you say is true. But, if the outer countries had their own currencies, wage levels would be lower due to their currency being lower. That is however not an option any time soon.

        If we look at the three sector balances for any country:
        Public Sector Balance +Private Sector Balance + Rest of World Balance=0

        We can compare countries like Germany and Greece
        Germany runs a balance of trade surplus with the Rest of the World. Therefore the last term is negative.
        The Private Sector save, in true German style, for their pensions etc. Therefore the second term is positive.
        So the Government can comfortably run a closed to balanced budget without causing a deflationary effect on their economy.

        It’s a lot different for Greece or Spain.
        Their balance of trade is poor. Therefore the last term is positive.
        There are still many who wish to save (people do when times are bad) so the second term is positive too.
        The EU requires countries to minimise their deficit. So the periphery have to try to balance their budgets. The first term has to be close to zero.

        The dictat of the EU is effectively one of trying to suspend the rules of basic arithmetic. The more Governments try to achieve the impossible the more the economy spirals downwards in search of a ‘zero solution’ to the equation.

        Its hard to see any sort of positive outcome . Forcibly stop Greeks and Spaniards saving? Import controls within the Euro region? They would work but there are obvious problems! But, the first step is to at least recognise the reason for the problem. It’s pretty obvious but I don’t see any indications that the penny has dropped. German politicians, mainstream European economists, the IMF and many others are locked into a neo-liberal mindset.
        They are like old fashioned doctors who prescribe the bleeding of a patient . When that doesn’t work they prescribe more bleeding. Then more and more until the patient dies! Afterwards they all agree that bleeding was the right course of action but they probably should have prescribed it earlier and in greater amounts! Is this supposed to be the 21st century?

        • Posted January 10, 2014 at 11:57 am | Permalink

          I do like your last sentence. The idea there is crying out to be made into a cartoon.

    • Lifelogic
      Posted January 9, 2014 at 3:41 pm | Permalink

      Exactly, destruction of the economy by deliberate EU and UK government design and total incompetence. The more desperate the electorate are then the cheaper their votes can be bought using there own taxes (not that much democracy now actually remains).

    • waramess
      Posted January 9, 2014 at 5:00 pm | Permalink

      This is absolutely true and I am always quite impressed that the average employee can generate at least twice as much productivity as he/she consumes.

      How do I know? Because the average employee supports himself and a government that consumes fifty percent of production.

      Big government reduces the investment available to the private sector, it reduces the number of people who could otherwise be producing and it causes poverty.

      Of course it is rather more complex because the minimum wage militates against the cost of production etc etc but governments will always find a reason why it is not their fault.

      There is absolutely no reason for either poverty or unemployment in the world other than government interferance.

      • John Armour
        Posted January 14, 2014 at 9:47 am | Permalink

        Big government reduces the investment available to the private sector, it reduces the number of people who could otherwise be producing and it causes poverty.

        I’d be most interested to hear you explain the mechanics of that process.

        See if you can do it without mentioning the “crowding out” nonsense.

        There is absolutely no reason for either poverty or unemployment in the world other than government interferance.

        You have this exactly backwards. Left to “the market”, unemployment comes to equilibrium at levels that fuel revolution.

        We learned this lesson the hard way in the 1930’s.

    • uanime5
      Posted January 9, 2014 at 9:58 pm | Permalink

      Bloated governments interfering in labour markets with minimum wages, gross over taxation, punitive dismissal regulations and the ridiculous single currency.

      Do you seriously believe that people would work for less than minimum wage or if they had no protection against arbitrary dismissal? The UK will continue to decline if we treat our best workers so badly that they move abroad to countries that will treat them better.

      • lifelogic
        Posted January 10, 2014 at 10:26 pm | Permalink

        You ask:- Do you seriously believe that people would work for less than minimum wage?

        Well if this is true there is clearly no need for the minimum wage law at all is there.

    • Bazman
      Posted January 10, 2014 at 4:02 pm | Permalink

      The minimum wage and employment regulations are to blame, so getting millions to work for nothing and be able to fire them at will will do any good? Just stupid. What of the millions who just refuse quite rightly to work like this. Fire them?

      • libertarian
        Posted January 15, 2014 at 10:30 pm | Permalink

        Bazman

        There is NO minimum wage in Germany, Norway, Sweden and Switzerland. How are things working in those countries?

  4. Mike Stallard
    Posted January 9, 2014 at 7:39 am | Permalink

    I left Spain about 10 years ago. I tried to settle there in my retirement. I used to go to the town Library in San Pedro, Murcia, to do a bit of study and it was, ten years ago, packed with bright eyed, hard working and vibrant 6th formers who had swallowed the line that if they were good students and worked hard and went to University, then the whole world would be opened up to them.

    Now they know the truth.
    I find that really heartbreaking actually.

    • yulwaymartyn
      Posted January 9, 2014 at 11:15 am | Permalink

      My friends in India tell me that about 250,000 young spanish have settled in Southern India. They are attracted by the cost of living and as there is no work in Spain. Apparently a train journey there of about 1000 miles costs in the region of £12.00

      Apparently a further 200,000 have moved to Germany where the jobs are. Germany is one of the top exporters to India so its a question of getting on your bike (or plane) and looking for work as our Norman told us all those years ago.

  5. Mark B
    Posted January 9, 2014 at 7:47 am | Permalink

    The Economies of the various Euro Countries are far too diverse. Germany is benefiting from a weak Euro, although I hear from elsewhere, that life is far from perfect in Der Fatherland.

    At some point in the future, there will be political, fiscal, and financial union, and coupled with that, bank transfers from one nation state too another. This the German’s will not like, as they were specifically promised that this would never happen. It of course being a precondition on them joining the Euro. So, another countries people gets lied to, in order to acquiesce their acceptance of that which they would not ordinarily give. What a surprise !

    What is not being said is that of the future. These young people will become the voters of tomorrow and, even some of its politicians. They will come to see the dream of ‘Europe’, (to give the EU its other name, although I do not know why people insist on that) as the cause of their ill and not its solution.

    When you are trying to build a nation, much like say the USA, you first must have a Demos and a codified system of law. The early settlers had English Common Law, which they use today, as does an independent India, to name but one of many. It is these laws and a sense shared national identity which give them a shared community or tribe if you like. Can you say the same about the EU outside the Euro Bubble ? And that is, and will be the undoing of the European Project. It is a Government and a Nation State in the making, yet, it has no Demos. And what Demos there is, the EU is making it increasingly difficult for those on the ‘outside’ to be a part of it. Its the tyrant of a Europhile minority, a bit like the Palace of Westminster.

    • uanime5
      Posted January 9, 2014 at 10:02 pm | Permalink

      The early settlers had English Common Law, which they use today

      Where exactly did the early settlers get this English Common Law? Given that the original Anglo-Saxons were from Scandinavia are you referring to Scandinavian laws?

      It is these laws and a sense shared national identity which give them a shared community or tribe if you like. Can you say the same about the EU outside the Euro Bubble ?

      Well given that the EU is harmonising laws within the EU …

      • Mark B
        Posted January 10, 2014 at 2:53 pm | Permalink

        The EU is not so much harmonizing as replacing English Law with Nepolionic. And please don’t ask for link !

        • uanime5
          Posted January 11, 2014 at 12:18 am | Permalink

          How exactly is the EU replacing English law with a civil law system? For example a common law system has binding precedents while a civil law system does not, so how has the EU tried to change precedents?

          • Mark B
            Posted January 12, 2014 at 2:47 pm | Permalink

            By Treaties and Directives. Also, you may have heard of Commissioner Reding’s views on a United States of Europe. Care to tell us what system of Law they will be using ? I’ll give you a clue – it won’t be ours.

  6. matthu
    Posted January 9, 2014 at 7:48 am | Permalink

    My guess is that employment rates are inversely related to the burden of government.

    • Lifelogic
      Posted January 9, 2014 at 4:52 pm | Permalink

      Indeed, that and how much the government actually pays people to encourage them not to bother working.

      • Bazman
        Posted January 10, 2014 at 4:05 pm | Permalink

        You think if they where starved this would help them find work? You need to explain how desperation creates jobs? Not that I expect any sense from you Illogic.

        • Mark B
          Posted January 12, 2014 at 2:49 pm | Permalink

          Well hunger and poverty seems to be motivating a lot of people to want to come here. Or it just could be because we are very generous with the benefits.

    • Posted January 10, 2014 at 2:18 pm | Permalink

      “My guess is that employment rates are inversely related to the burden of government.”

      So your ‘guess’ would be that, as unemployment, is higher now than it was 10 years ago that the burden of government is higher now than it was then? The burden of government, according to your theory, must have reached a peak in the mid thirties. Then it fell during WW2. Rose slightly afterwards and reached another peak in the 1980’s.

      Would you like to take another ‘guess’?

      • matthu
        Posted January 10, 2014 at 3:57 pm | Permalink

        So your ‘guess’ would be that, as unemployment, is higher now than it was 10 years ago that the burden of government is higher now than it was then?

        Yes, taking everything into account. Including the EU, including VAT. Can you convince me that the burden of government has gone down over the last 10 years?

        • Posted January 11, 2014 at 1:21 am | Permalink

          The extent of government involvement has probably not changed much in the last ten years.

          If you are going to theorise on a correlation between government involvement in the economy and the level of unemployment, or the level of employment, you’ve got lots of data at your disposal. There are figures going back to at least the start of the 20th century on the % tax take for example.
          Does that correlate with levels of unemployment?
          Unemployment in the 80’s was higher than in the 90’s which was higher than 00’s. Does this mean that the burden of government fell during this period?

          • matthu
            Posted January 11, 2014 at 9:51 am | Permalink

            I did not claim that the burden of government was the only determining factor, simply that as the burden of government goes UP (and all other things remain equal), employment suffers.

            The burden of government can be financial or regulatory. Eventually, as the burden goes up it no longer remains worthwhile to employ as many as before.

            Self evident, really. Except possibly to a staunch Europhile.

          • Posted January 11, 2014 at 8:28 pm | Permalink

            No-one is saying that Government should be large for its own sake. How big should it be? That’s a political question. You could privatise just about everything including the roads. You’d still have unemployment if the economy wasn’t correctly managed. There are many countries and many systems in the world. Can you show me an example of one with minimum government and low unemployment that meets your approval?

            “Europhile”? Wrong again. .

      • lifelogic
        Posted January 10, 2014 at 10:30 pm | Permalink

        Many factors, wars, technology, international competition and barriers but the government burden and government payments not to work are huge factors other things being equal.

  7. alan jutson
    Posted January 9, 2014 at 7:58 am | Permalink

    Truely shocking official figures.

    I have to say with the number of under 25’s out of work, I am surprised there has not been civil unrest on a grand scale.

    Whilst I understand that Government cannot simply manifacture proper jobs out of thin air, they can to a degree invest in the infrastructure of the country which should aid employment.

    One is forced to ask how the under 25 age group is existing ?
    Are they still living at home with Mum and Dad.
    Are they working in the alternative economy when they can.
    Are they continuing to study in some way.

    Clearly whatever policies the Countries you outline have been running, have failed a generation, given that all of the Countries you mention also have huge debt, they have also failed the whole population.

    All in it together ?
    No,
    Just pull up the ladder, I am all right.

    If ever there was an example that you cannot forever borrow your way out of a financial crisis, the present situation is spelt out in capital letters and misery.

    • bigneil
      Posted January 9, 2014 at 11:54 am | Permalink

      “are the 25yr olds at home” – -yes -and the policy here is that housing benefit for under 25s will be removed – so where do they go ? – -back home of course – this makes people live closer together -and will also free up accommodation for the “invasion” from other countries onto our shores and benefits.

      and I see Viviane Reding wants ( in truth) to be able to (place ed) (many ed) of unemployed Europe on our shores -(words left out ed) – -the EU are determined to make this island into a (less desirable place ed) – and are succeeding – they are not bothered about the consequences – and seemingly neither does Cameron or the judges.

      • alan jutson
        Posted January 9, 2014 at 6:22 pm | Permalink

        bigneil

        “Are 25 years olds at home”

        Exactly the point I made on yesterday’s blog, for exactly the reasons you suggest.

        I thus I agree completely, I was at home until I got married, and both of my daughters lived at home until they could properly afford a place of their own.

        It allows people to get their finances right, and helps them learn a little financial control before they make the jump into the big wide World.

        Does Spain offer housing benefit to anyone ?

    • Denis Cooper
      Posted January 9, 2014 at 1:21 pm | Permalink

      “you cannot forever borrow your way out of a financial crisis”

      No, you can’t, in fact you’re far more likely to borrow your way INTO one.

      But never fear, apparently when you come the end of the line with borrowing you can print your way out and no harm will be done.

      That’s assuming you still have your own currency to print.

      • Posted January 10, 2014 at 2:36 pm | Permalink

        I do my best to explain how the currency works but you still think Government borrows in the same way as you or I would by rocking up to the bank and speaking nicely to the manager etc etc.

        Government can’t borrow back its own IOUs. Think about it. You can’t and Government can’t either. It can swap one IOU (cash) that doesn’t pay interest for another form of IOU (gilts) that does. In doesn’t matter so much when interest rates are very low like now. But in normal times its a few percent. Why would the Government ever have a problem persuading the commercial banks to accept interest payments? Which , incidentally, can be whatever the Government decides they should be.

        If you put, say, your tax refund money in a bank ( or any money issued by Government) you are forcing the Government to ‘borrow’ it back. Most people would think that the banks lend it out again to businesses or house buyers. That’s not true. They lend out their own IOUs not Government IOUs which they keep as a reserve or convert to gilts.

        • Denis Cooper
          Posted January 11, 2014 at 10:47 am | Permalink

          And I’ve repeatedly pointed out, ad nauseam, for nearly five years now, that as practised in the UK so far the process of QE has meant one arm of the UK state, the government, and specifically the department of the government known as the Treasury, indirectly swapping its IOUs, known as gilts, for IOUs issued by another arm of the state, the Bank of England, which we know as money.

          I’ve clarified that while the government and the Bank are both arms of the UK state the Bank is not actually part of the government, any more than the courts are part of the government, notwithstanding that the Bank has been wholly owned by the government since 1946, and notwithstanding that the Bank is supposedly accountable to another arm of the UK state, Parliament, which in 1998 legislated for the Bank’s operational independence with respect to monetary policy unless the Treasury asked Parliament to activate reserve powers, which it has never done.

          I’ve pointed out when the Darling first authorised the Bank to set up the Asset Purchase Facility the stated intention was that it would only buy high quality private sector assets, to a limit of £50 billion, and those purchases would be funded by the Treasury, as set out in his original letter of January 29th 2009:

          http://webarchive.nationalarchives.gov.uk/+/http://www.hm-treasury.gov.uk/d/ck_letter_boe290109.pdf

          According to that original letter the objective was to increase the availability of corporate credit by increasing liquidity and trading activity in UK financial markets, and because the purchases would be funded by the Treasury it would not involve the Bank creating new money.

          As Darling pointed out on January 19th 2009 at Column 489 here:

          http://www.publications.parliament.uk/pa/cm200809/cmhansrd/cm090119/debtext/90119-0005.htm

          in response to Osborne’s premature accusation that the asset purchases would amount to “a programme of “quantitative easing” – the modern equivalent of printing money”.

          I have also pointed out that within weeks the original scheme had in fact morphed into one where the Bank would not only create new money to fund the purchases, but it would now buy up gilts as well as private sector assets, as authorised by Darling in his next letter dated March 3rd 2009:
          http://webarchive.nationalarchives.gov.uk/20100407010852/http://www.hm-treasury.gov.uk/d/chxletter_boe050309.pdf

          In that second letter Darling raised the total limit on purchases to £150 billion, of which up to £50 billion would still be used to buy private sector assets; but it quickly became clear that essentially the Bank was only buying up gilts and hardly any private sector assets.

          So by the late spring of 2009 it had become clear that the Bank had been induced to save the government from imminent bankruptcy by stepping in as a captive gilts investor to indirectly lend the Treasury newly created money, its IOUs, so the government could continue to pay all its bills on time and in full, those investors who would have normally provide the Treasury with existing money in exchange for its IOUs, gilts, having become increasingly wary about doing so.

          And I have explained that the Treasury needed the Bank’s IOUs, money, to pay its bills, because those who are owed money by the government expect to be paid in money and not in the Treasury’s IOUs, gilts, whether it’s a case of nurses being paid their salaries or suppliers and contractors to public bodies getting their invoices paid or old people getting their state pensions, and in none of those cases would it have been satisfactory to pay them partly in gilts because, as I put it as a simple everyday and what I thought would be an easily understood example, supermarkets do not allow their customers to pay for their groceries with gilts, or with corporate bonds, or with share certificates, or even with gold bullion.

          I have also quoted from Article 123 in the Treaty on the Functioning of the European Union to explain one legal reason why both the Bank of England and the European Central Bank have been lending money to governments indirectly by buying their bonds on the secondary market, rather than by buying bonds directly from the governments or extending overdrafts, while also suggesting that they actually prefer to proceed in this less transparent way so that the public find it more difficult to work out what is going on.

          I have also pointed out that while it may tempting to think that the Treasury could persuade the Bank to just forgive the massive debt represented by the Bank’s £375 billion holding of gilts:

          http://www.bankofengland.co.uk/markets/Pages/apf/results.aspx

          that would leave the Bank with negative net assets, that is to say in simple terms it would be bust, and therefore you and I will have to pay more taxes in the future so that the Treasury can repay the Bank just as it must repay all other holders of its IOUs, gilts.

          And finally I warned in the summer of 2009 that those Tories who had long been reassuring each other that eventually the Labour government would run out of money to spend, because that it what Labour governments always do, should realise that this time it had resorted to the QE cunning device to avoid that happening, and that this would have political as well as economic consequences.

          I’m not sure that there is still much to be gained by repeating these points over and over again, because if they are not obvious by now then they never will be.

          • Posted January 12, 2014 at 6:03 am | Permalink

            Denis,

            Yes I know how you and mainstream economists think QE works.

            Except that my comment above wasn’t at all about QE. The process of swapping one IOU for another (ie selling Treasury Gilts) is how Govt has always funded its debt.

            The Treasury exchange the Gilts (interest bearing IOUs) for currency (non interest bearing IOUs) which they then spend.

          • margaret brandreth-j
            Posted January 12, 2014 at 8:29 pm | Permalink

            Have been thinking about gilts and IOU’s and the possibility of buying back IOU’s. Of course in our real world it is impossible to buy back any IOU we can only wipe it out of existence by repaying. If it corresponds to something e.g a product or something more solid, then we can buy it back provided that we are going to pay more for it than we owe; that would be doubling and with added interest.

        • Denis Cooper
          Posted January 13, 2014 at 10:57 am | Permalink

          Margaret, gilts, a form of IOU issued by the UK Treasury, are traded between investors every working day. That “secondary market” in gilts which are in issue has a very large volume and is very liquid, with various investors readily buying and selling different issues for various reasons, sometimes speculation but often also for sound reasons such as the need for a pension fund to adjust its portfolio of gilts so that it can be sure of getting the income it will need to pay the pensions at all future dates. You can look up the most recent quoted market prices for all issues of gilts in the FT, and unlike some other financial markets the gilts market never seized up during the crisis, it was always possible for somebody who held gilts to sell them and get cash if they wanted. Which is why in early 2009 it made no sense at all when the media were pretending that the Bank of England had started to buy up gilts to improve market liquidity, that was obviously complete nonsense. If the Treasury has spare money then it can offer to buy back previously issued gilts from investors, and I recently mentioned that in 2001 the Treasury did hold three “reverse auctions” for that purpose; but those were the only three occasions over the past sixteen years when that was done, all the rest of the time the Treasury has only been holding normal auctions to sell new gilts to cover the government’s budget deficit. In general the Treasury will then pay whoever holds the gilts at the time their interest every six months for the term of the gilt, and then pay the capital sum at the end of the term. Thanks to “quantitative easing” as it has been practised in the UK about a quarter of all the gilts in issue are now held by one investor, the Bank of England or more accurately its Asset Purchase Facility, the Bank having been induced to become a kind of captive investor and now in fact the government’s largest single creditor by miles. How that will be resolved remains to be seen; it could be that the Bank will hold all the gilts to maturity, or it could be that in better times when the Treasury is no longer issuing such huge volumes of new gilts the Bank will be able to gradually sell some of its holdings of previously issued gilts back to private investors without depressing market prices too greatly; but simple cancellation of the gilts is not an option, as the Bank would then be bust.

    • Lifelogic
      Posted January 9, 2014 at 4:54 pm | Permalink

      The government need to get out of the way, not try to create any daft fake jobs by taxing the productive. We have more than enough daft green schemes and silly trains already.

    • uanime5
      Posted January 9, 2014 at 10:10 pm | Permalink

      I have to say with the number of under 25′s out of work, I am surprised there has not been civil unrest on a grand scale.

      Well there was a riot after Mark Duggan was killed. It’s possible that some of the people involved weren’t just angry at the police.

      I’d say we’ve avoided civil unrest because most under 25’s are pacified by benefits, which allow them to have a meagre existence. However if benefits were cut for this group they will will become more volatile.

      Are they still living at home with Mum and Dad.

      Only if they can’t get housing benefit.

      Are they working in the alternative economy when they can.

      Well young people are overrepresented in the prison population so it’s possible that many of them are turning to crime to make money.

      Are they continuing to study in some way.

      Given the costs of doing this it’s unlikely as you can’t claim benefits while studying full time for some reason. Though some basic courses are free if you’re unemployed so there is some help available.

      • alan jutson
        Posted January 10, 2014 at 10:21 am | Permalink

        Uni

        I was commenting about the situation in Spain.

        Whilst in an ideal World I would like to see full employent, I realise that is but a dream, the situation here is far better than that in many other Countries.

        It will only get worse here, if millions come from Europe or anywhere else, to undercut the market rate here.

      • Mark B
        Posted January 10, 2014 at 3:00 pm | Permalink

        U5 said;

        “Well there was a riot after Mark Duggan was killed. It’s possible that some of the people involved weren’t just angry at the police.”

        No. But when the Russian peasantry revolted in 1917, they wanted bread, peace and land. Our lot chose, Nike, Booze and Fags, but left out books. Poverty clearly takes many forms.

        • uanime5
          Posted January 11, 2014 at 12:28 am | Permalink

          I’d say the February revolt in 1917 was more to do with replacing the Tzar with anyone else as he’d become deeply unpopular (even among the nobility). The October revolt was more to do with the Provisional Government and the Soviets fighting over control of Russia.

          • Mark B
            Posted January 12, 2014 at 3:03 pm | Permalink

            So what you are saying is, they had their priorities. Which is what I was pointing out. Those who took to the streets in 2011 did so for selfish reasons. They were not starving nor sis they wish to change the system of government. It was sheer criminality, nothing on a par with 1917, which was my point.

            Nice of you to agree with me though.

  8. Posted January 9, 2014 at 8:04 am | Permalink

    The Euro is an exceptional case, a dangerous experiment of a currency divorced from individual nations themselves. The Euro is a foreign currency to all its users -except, some may say, Germany which has insisted right from the start that the Euro should be, to all intents and purposes, a continuation of the DM.

    All 17 governments that use the Euro are users not issuers of the currency. They have all scrapped their sovereign currencies. They now lack the powers that a sovereign issuer has. Japan, the United States, the U.K., Canada, Australia, are sovereign issuers. Governments that adopted the euro must borrow the currency. They must pay whatever the bond vigilantes require. They can run out of money. And they lack the policy space of a sovereign issuer.

    For a member of the Eurozone, such as Italy the relationship between the government and the currency is different to the UK relation to the pound. Italy does not issue the currency that it uses. A country giving up control of the currency effectively gives up its own independence. Italy has becomes a State like Georgia is the sense that Georgia is a State of the USA. Except that the Eurozone doesn’t have anything like the financial infrastructure, which exists in the USA, and which is needed to equalise the imbalances between the richer and poorer parts of the currency zone and make a common currency work.

    The problem with the euro is that it cannot be created as needed. The governments must go out and get euros from someone else. The Eurozone countries have sacrificed their ability to conduct sensible economic policy, and the effects are clearer now than ever.

    But the Spain, Greece , Ireland and the rest can’t say they weren’t warned. In 1997 Wynne Godley wrote:

    “The danger then is that the budgetary restraint to which governments are individually committed will impart a dis-inflationary bias that locks Europe as a whole into a depression it is powerless to lift.”

    The UK thankfully learned from its own experience the pitfalls of tying its own currency to another currency with its ill fated attempt to shadow the DM in the 90s. That ended in the debacle of Black Wednesday. But better a debacle than a disaster. At least the pound still existed, at the time, and could be freed.

    • miami.mode
      Posted January 9, 2014 at 10:10 pm | Permalink

      Peter

      It’s now 18 – Latvia joined the Euro on 1st January this year.

      Maybe they think European servitude is less threatening than the Russian bear.

    • Mark B
      Posted January 10, 2014 at 3:16 pm | Permalink

      ” . . . . a dangerous experiment of a currency divorced from individual nations themselves.”

      The Euro is not an ‘experiment’. It has flaws, which were known at the time it was created. Germany did not want to be the lender of last resort much like the Bank of England was to Northern Rock, RBS etc. So they (Germany and Chancellor Kohl) made sure that bank transfers could not happen. That is why we are seeing countries like Greece begin to struggle under a currency that clearly does not suit their economy. The only way out of this impasse is to provide closer fiscal union, but that cannot happen unless you have political oversight and that means in turn political union. This the architects of the Euro knew. They knew that this would happen and were warned so.

      No country with the exception of Germany qualified to join the Euro, least of all Greece. But their was a lot of stuff going on behind the scene.

  9. David Andrews
    Posted January 9, 2014 at 8:46 am | Permalink

    This is what happens when dogma (the primacy of the euro above all else) requires that blinkers be worn so that the collateral damage caused by the dogma is obscured and ignored.

    We saw a rare glimpse of that yesterday in the reported comments of Dr Mackay, the chief scientific adviser to the Department for Energy and Climate Change. He complained that we suffer the very bad habit of buying new cars when, instead, we should be repairing old cars. In essence he wants to shut down car manufacturing and rely on repairing the existing car stock to meet the nation`s motoring needs. (Does he have Cuba in mind?) That would work wonders for job prospects! What he failed to recognise is that cars are not scrapped by their first owners but sold on; most last at least ten years, some twenty years and others even longer often in the hands of several owners.

    My MP tells me that Ministers rely on the advice of their scientific advisers. Yet this is the man who provides advice on energy policy that is costing the nation dear. Presumably he is the man behind the negawatts idea, praised by Cameron, Clegg and Huhne in their Carbon Plan to pay businesses not to operate their factories. That policy is now being implemented by Mr Davey.

    Your colleague, Mr Lilley, commented that new appliances were more efficient than old appliances. “If we repair the inefficient ones we will consume more energy.” According to the Daily Telegraph “he added that Professor Mackay should either decide whether he`s chief scientific adviser or whether he`s going to join Friends of the Earth and knit his own socks.”

    • alan jutson
      Posted January 9, 2014 at 6:26 pm | Permalink

      David

      The EU have a solution to cars giving out pollution.

      It is to reduce the speed limits to reduce pollution. !!!!!

      Thus when we get eventually down to walking pace, we will realise we do not need cars, and thus people will not need to go to work to make them.

      Will allow everyone to breath fresh air, but no one will have any money to buy food or anything else, because they have no work !

  10. Hope
    Posted January 9, 2014 at 9:15 am | Permalink

    JR, the acquiescence to EU rule is very apparent in your party and is very strong in Cameron and his choice of cabinet and UK representatives in the EU. And it must be said, it appears people like you, well respected and highly regarded by eye bloggers here, continue to support Cameron. He made it clear how he supported the Climate Change Act and he made the causal link between the weather and climate change, all constructs of the EU green fake agenda. He distinctly gives me the impression he puts the EU before country and national interest.

    We have rehearsed time and again how he bailed out Eurozone countries when he said he would not, he stood by and watched when the EU committed regime change in Italy and Greece, he stood by allowing the EU to steal from Cypriot bank accounts, he allowed the EU to circumvent treaty change and set terrible presidents under the veto that never was, yet is happy to go to war with Syria for less! Some serious questions need to be asked by you and your colleagues about your party and national interest.

  11. Edward2
    Posted January 9, 2014 at 9:21 am | Permalink

    In the USA, all the wealthy states are taxed and their surpluses help support poorer states in the Union.
    Even with that massive financial redistribution the poorer states remain much worse off.
    But in the EU, you have just one dominant state, Germany, which is by far the wealthiest and the others are much poorer.
    These poorer states cannot fall back on a floating exchange rate reducing the pressure on them, as the Euro rate is largely controlled and set by the performance of Germany.

    Unless Germany is prepared to sacrifice some of its own wealth to share with the other states in the zone, only worse is to come.
    It also needs a much less socialist, more democratic and more commercially minded approach by the commission, but that is not going to happen either.

    It is amazing to me that there is so little opposition and reaction to these dreadful unemployment figures, especially from the trade unions and the left in Europe.
    Do they think the pain so many European people are having to suffer is really worth the chance of a future socialist Europe?
    If equality is their goal, it will end up an equality of poverty.

  12. Douglas Carter
    Posted January 9, 2014 at 9:22 am | Permalink

    From no less an authority than Vince Cable do we need to look.

    Your answer, John, must lie in the low numbers of unskilled immigrants moving to these countries. It is well known, and an accepted orthodoxy, that the intake of very, very large numbers of unskilled immigrants – at the very least in the millions preferably – increases employment opportunities for all, in particular the similarly unskilled indigenous workers in that country.

    We should suggest that France, Portugal, Spain and Greece each accept – say – an additional five million immigrants in each country from eastern Europe, North and Central Africa and from Asia.

    However, as a caveat, it’s critical that none of these migrants have any form of qualification or skill, or at least as few as can be achieved. It is also a pivotal condition for success that no additional infrastructure nor accommodation be secured intentionally for such – those things must magically appear from thin air in an act of manifest collective dogmatic wishful thinking. They will quickly appear thus – naturally – our politicians will be ever ready to assure us of the permanent supplementary structures. But you may well observe that there will be no actual physical evidence of the existence of these additional infrastructures and habitations. You will find in next to no time that each of these nations will develop as industrial and economic powerhouses to rival Germany, accruing burgeoning employment potential with money to burn.

    Either that, or Vince Cable and others who rigidly apply to the immigration religion are talking utter rubbish. And I just don’t see how that can be possible?

    Hope that helps?

  13. peter davies
    Posted January 9, 2014 at 9:52 am | Permalink

    It can only be summed up in one word – SHOCKING!

    The worse thing is, despite all the hardship they carry on like everything is normal wanting to finish the job of hollowing out democratic governments with people high in the Commission openly talking about a fully federated US of E.

    The federalist types who support this in my view are nothing but “useful idiots”. I remember a quote from MT saying this would end in tears and she wasn’t even an economist – one wonders how much more people in the affected parts of the EZ are prepared to put up with this before they turn on their govts and the EU.

    Its time to pull the plug on the whole thing – revert back to own currencies and setup an EFTA style free trading block without the political interference. The EU Commission could be turned into a refugee hotel or a theme park and the parliament could become an O2 arena type theatre.

    Once one country pulls out hopefully others will follow suit (or is that what these people are scared of?)

  14. Posted January 9, 2014 at 9:54 am | Permalink

    John, I would not underestimate the potential for agitation over high unemployment. My understanding is that some communities are tinderboxes and some unrest has been under-reported with, I suspect some agreement with mainstream media to keep reporting low key for fear of triggering copycat riots (interesting dilemma for the media).

    However I also understand that the black and grey economies are doing much better with reports of mini busses outside dole offices waiting to ship workers to clandestine factories and (soon) at farmers’ fields.

    As always, the People find a way of circumnavigating when the official channels start to fail. I am not condoning this but, let’s face it, the dark side of the eu economy is probably doing much better than the official economy.

    We of course have the option to wreck our economy in another way, but debasing our currency. That, of course, is the nub: all western economies are wrecking their economies and looking relatively OK against each other. The ships are not sinking because the water level is falling roughly equally for all – except for the Far East that is.

    Well, at least we still have parental leave.

  15. Iain Gill
    Posted January 9, 2014 at 9:56 am | Permalink

    I wouldn’t trust those figures too much. Even stuff that I know first hand blows them open. For instance in Greece its perfectly possible to operate in the black economy and earn enough to live from casual tourist work, or as a subsistence fisherman, with no contact with the tax or employment authorities, large numbers who face employment problems can shift into subsistence fishing or farming or similar. In the UK many middle class people, freelancers and the like, are currently not engaged, and have been out of work for long periods choosing to deplete their savings rather than bother with the unemployment office. So in all sorts of ways the figures even at a casual glance are wrong, which is not to say there is not a problem.

    Issues I would highlight include the leaking of leading European intellectual property to other lower cost base economies, allowing those countries to undercut Europe by using these leading techniques without the burden of higher cost anti pollution measures, expensive safety kit, and so on that Europe has. This has always gone on but its happening much faster, and Europe needs that intellectual property to justify its premium prices on the world markets otherwise it is just competing on price which it can never win against lower cost base economies. The ways the IP leaks need looking at.

    Other issues include international outsourcing where large European workforces have been replaced with small numbers of outsourcing staff in Europe at the tip of a large iceberg of workers in the developing world offshore doing the work that until recently native Europeans were doing. This has been made easier by technology and by lax immigration rules in the West allowing the tip of the iceberg to operate unrestricted.

    Newer technology also makes it easier to produce high quality output in emerging nations without the people skills needed until recently.

    So as much as the accountancy view of the world is important, the pragmatic reality of what’s happening to workers on a day-to-day basis needs to be understood.

    As yes the European workers are remarkably tolerant, but there is increasing frustration with the political class who don’t seem to have a joined up plan.

  16. Brian Tomkinson
    Posted January 9, 2014 at 10:01 am | Permalink

    Don’t worry – the EU Commission has the answers to everything – today’s Telegraph: “A campaign for the European Union to become a “United States of Europe” will be the “best weapon against the Eurosceptics”, one of Brussels’ most senior officials has said.
    Viviane Reding, vice president of the European Commission and the longest serving Brussels commissioner, has called for “a true political union” to be put on the agenda for EU elections this spring.
    “We need to build a United States of Europe with the Commission as government and two chambers – the European Parliament and a “Senate” of Member States,” she said. ”
    There we have it, at last the EU is ‘coming out’ with what many of us have known for years but has been scoffed at by the EU fanatics here and abroad. Now what is your pro-EU leader going to do? Anyone who wants self-governance and an end to this subservience must vote for UKIP in the May elections.

    • Atlas
      Posted January 9, 2014 at 12:41 pm | Permalink

      Quote: “We need to build a United States of Europe with the Commission as government and two chambers – the European Parliament and a “Senate” of Member States,” she said. ”

      Isn’t this what J. Delores said all those years ago – that got Thatcher so upset?

    • John E
      Posted January 9, 2014 at 4:11 pm | Permalink

      Well at least her position is logical and clearly put. The status quo is not sustainable so either the Euro Zone becomes a country or it will have to be dismantled. The choice will have to be made eventually.

      • lifelogic
        Posted January 10, 2014 at 11:15 pm | Permalink

        “Well at least her position is logical and clearly put”.

        Unlike for example Cameron’s position which is:- put it off a long as possible until after you are out of power, say one thing do the opposite, do not estimate or provide for the new wave of immigration but pretend to be against it, pretend you can negotiate something real (but throw the towel in before you start) and do not even say what your negotiation demands actually are.

    • uanime5
      Posted January 9, 2014 at 10:25 pm | Permalink

      “We need to build a United States of Europe with the Commission as government and two chambers – the European Parliament and a “Senate” of Member States,” she said. ”

      You do realise that this senate will give the UK another chance to block EU laws. Also there are even plans to have the European Council act as the Senate, which will result in Cameron representing the UK in the Senate.

      • Edward2
        Posted January 10, 2014 at 10:38 am | Permalink

        Care to explain how the system of one vote and no veto is going to give us more power?

        • uanime5
          Posted January 11, 2014 at 12:32 am | Permalink

          Well the UK will find it easier to convince 27 other countries than 694 MEPs to block something.

          • Denis Cooper
            Posted January 11, 2014 at 11:00 am | Permalink

            Thanks a lot.

            Alternatively, we could have a national veto available to block EU proposals without having to convince anyone else, just as we were promised at the time of the 1975 referendum.

          • Edward2
            Posted January 12, 2014 at 11:02 am | Permalink

            With 20 taking money out and only 7 paying in this won’t work as a democratic system.
            It should be a voting system based on a formula mixing population size added to the amount of money put in.

  17. John E
    Posted January 9, 2014 at 10:03 am | Permalink

    It is staggering that the youth unemployment is tolerated by voters in some countries. Do you believe the Euro zone can survive as it is? Eventually unrest must bring this to a head?

    I think the position of France is critical. It is becoming a “Southern” economy and the French will not put up with this.

    Ultimately I believe the Germans will not pick up the bill and they will leave. There must be some people in a basement in Frankfurt working on this – probably now out of the range of our eavesdropping capabilities.

    • Posted January 9, 2014 at 11:22 am | Permalink

      John, I’m sure you are right about the Germans but sadly mistaken about the French.

      I spend a lot of time in France and there is no appetite evident amongst the general public for any of the reforms necessary to make their economy competitive. They seem happy to put up with appalling customer service and high prices for almost everything.

      Their natural arrogance leads them to think that they are right and everyone else is wrong. They particularly resent the Anglo Saxon way of doing things and, of course, resentment of the Germans also runs very deep. All they want from the Germans is their money and are prepared to do nothing in return.

      The French economy is in a relentless downward spiral and this is likely to continue until a politician like Margaret Thatcher emerges to drag them up by the bootstraps.

      As a socialist, Hollande doesn’t believe in any of the workable solutions and even if he did, he’s completely incapable of doing anything about it.

    • Posted January 9, 2014 at 12:56 pm | Permalink

      The reason there has been no social unrest is because most people are actually working for cash-in-hand – and claiming unemployment benefit at the same time.

      I’ve heard stories of people working in South America whilst claiming unemployment benefits in Spain – they claim using the internet and the benefits are paid into their Spanish bank accounts.

      I’ve no way of knowing whether the story is actually true of course – but from my own personal experiences in the UK I know that claiming whilst working is pretty common.

      • Bazman
        Posted January 10, 2014 at 4:15 pm | Permalink

        In some areas this is the norm due to lack of work. The wife works in shop or cleaning and they claim benefits. The amounts are small such as a tenner a day fixing a working neighbours car of doing the gardening for him. A bit of beer money to escape the drudgery. If he is a good boy then a few quid to the wife/children. You pick up coins when you find them. Any bubble heads want to make some sort of moral judgement on this do carry on…

  18. Barry Sheridan
    Posted January 9, 2014 at 10:06 am | Permalink

    Dear Mr Redwood, the number of unemployed in Germany is significantly understated, this happens because many who are in effect unemployed are not counted for one reason or another. I suppose the same might be said here, so overall I would suggest that the figures are much worse that those mentioned in your blog.

    • Arschloch
      Posted January 9, 2014 at 11:39 am | Permalink

      Ok then what methodology have you used to show that German unemployment figures are incorrect especially when a country’s figures are gathered to an international standard?

      http://en.wikipedia.org/wiki/Division_of_international_labor_comparisons#cite_note-11

    • Johnny Norfolk
      Posted January 9, 2014 at 3:21 pm | Permalink

      I dont think people living here have any idea how the Germans behave with statistics. They are happy to change any of them to fit what is required.They look upon it as a game.

  19. A different Simon
    Posted January 9, 2014 at 10:14 am | Permalink

    Corruption enabled by transfer payments from other parts of the EU .

    In most of these countries projects are delayed indefinitely because too many wheels need to be greased .

    In countries like Spain with semi-autonomous regions there is another level of bureaucracy .

    The EU needs to stop transfer payments and reduce the transit of labour so that these countries are forced to sort themselves out .

    Of course corruption exists in every country in the world , even our own , but the corruption is much more efficient over here .

    • A different Simon
      Posted January 9, 2014 at 10:26 am | Permalink

      Maybe the whole point of transfer payments from the richer countries to the poorer countries – to nurture corruption in order to keep these countries in their place .

      To foster dependency so they can pay our banks interest .

      What a fall from grace for former industrial powerhouse Italy though .

  20. Sir Trev Skint
    Posted January 9, 2014 at 10:29 am | Permalink

    With so much compelling, adverse evidence against the EU, I find it extremely perplexing why the government is having problems justifying to the public why we should get out of the whole sorry mess. The OUT campaign should be winning the argument with ease.

    Yet instead half of the British public and most of the mainstream media still believe in the model.

    • matthu
      Posted January 9, 2014 at 1:06 pm | Permalink

      I find it extremely perplexing why the government is having problems justifying to the public why we should get out of the whole sorry mess.

      Because that is not what they are trying to do?

      They are trying to stay IN Europe. All the decisions unpopular to the electorate are forced on them, so no debate is necessary. Meanwhile, there is a never-ending stream of highly lucrative EU jobs and pensions for the boys. All tax free.

      Love it!

      • bigneil
        Posted January 10, 2014 at 12:43 am | Permalink

        you do realise that this country is not too far away from some men arriving in the middle of the night and “removing ” you -never to be seen again? – very soon individual common sense thought like yours will be banned under the EU dictatorship.

  21. S Matthews
    Posted January 9, 2014 at 10:36 am | Permalink

    The fact that there is not large scale unrest indicates that the figures may be exaggerated. There must be a large black economy emerging in southern Europe, and this is not fully allowed for in the unemployment stats.

    • Lifelogic
      Posted January 9, 2014 at 4:57 pm | Permalink

      There certainly is and inducements needed to get anything done by the state sector too often.

    • Leslie Singleton
      Posted January 9, 2014 at 5:40 pm | Permalink

      S. Matthews–And by no means just unemployment figures–Just think about the effect, or lack thereof, of the Black Market on the (hopeless) GDP figures, which, we are reliably told (by John), include both useful and useless activities. On that basis is say Burglary to be included?

  22. Posted January 9, 2014 at 10:42 am | Permalink

    There really is no hope for reform within the EU or the Eurozone, is there ?

    While our coalition with the LibDems is preventing us doing anything like enough to reduce the size of the state and reduce energy costs, it is also unable to deregulate because of Brussels directives.

    In the Eurozone, things are far worse : In most countries they are failing to deal with any of the major problems they face and in particular, Hollande is paralysed by his electoral promises and the inability for any President to govern France for fear of rioting on the streets.

    The Brussels elite know that it is essential to fully integrate and centralise taxation and budgetary control to make the Euro work but, while the politicians at the top table keep talking about it, they all know they can’t deliver the agreement of their electorate on any of it. In other words it’s doomed to fail – eventually.

    Yet, despite all the polling suggesting that the public right across the EU wants less Europe rather than more, leading politicians in Brussels are still pushing for “Ever Closer Union.”

    This week we have had a perfect example of just how detached from reality the Brussels establishment really is :

    Viviane Reding, vice president of the European Commission, no less, has actually called for national politicians to place the establishment of “The United States Of Europe” at the centre of their national campaigns for the European Parliamentary Elections in May !

    You can hear the pounding of feet as every candidate and party leader with any hope of getting elected rushes to distance themselves from Ms Reding.

    You couldn’t make it up, could you !

  23. boffin
    Posted January 9, 2014 at 10:43 am | Permalink

    Interesting stuuf from Gallup:
    http://www.gallup.com/poll/166757/leadership-approval-record-low-spain-greece.aspx
    – note the UK figures, Castiron (democracy? what democracy?).

    – and an insightful view on overbearing government:
    http://www.tradingfloor.com/posts/broader-relevance-ayn-rand-society-710110757
    (from a Banker, no less!).

  24. Graham
    Posted January 9, 2014 at 10:45 am | Permalink

    Just ‘collateral damage’ for the big project which rolls on relentlessly – despite all the rhetoric from our worthless leaders.

  25. ian wragg
    Posted January 9, 2014 at 10:49 am | Permalink

    I see the deputy whatever in Europe is calling for a United States of Europe and the EU elections should be used to further this aim. Nopt content with bankrupting many countries, they now want to all but abolish national parliaments and have a new EU Senate.
    With the prospect of civil unrest in the not too distant future, I would suggest that’s the last thing we need.
    Still we have mass immigration driving down wages and destroying local jobs but eventually all the immigrants will vote for the EU.
    Turkeys don’t vote for Xmas.

    • bigneil
      Posted January 10, 2014 at 12:36 am | Permalink

      but they would be ordered to do so under new EU rules brought in to curb rebellious turkeys- (coming soon to a turkey farm near you )

      curbs to control the typical French xmas dinner would be instantly ignored by the people of that country-unlike us -whose govt would instantly hand over millions in EU fines – more than we do already.

  26. Dom Wynn
    Posted January 9, 2014 at 10:54 am | Permalink

    Witness the failure of the Single Market & the Euro.
    For the internal market to function, freedom of movement is necessary. If a country is experiencing these levels of unemployment, since the Eurozone prevents devaluation, the only real option is labour market flexibility. By rights with an Spanish unemployment rate of 25% (6 million people), there ought to be probably 4-5 million odd Spaniards looking to move to an growth country such as Germany or the UK.

    Imagine selling that message both to Spain or for that matter the people of the UK.
    That largely explains the complacency of the European establishment: it’s functioning as designed, however to state as much is politically impossible.

    Regarding the acquiescence of the populace: I’m not sure there is. Witness the growth of ‘fringe’ resistance whether in the form of UKIP, Front Nationale, or PVV. It’s just that the political centre has absolutely no answer to the challenge, as what is occurring is so completely inherent to ‘the project’.

  27. Denis Cooper
    Posted January 9, 2014 at 10:57 am | Permalink

    Margaret Thatcher speaking in the Commons on October 30th 1990, Column 873 here:

    http://www.publications.parliament.uk/pa/cm198990/cmhansrd/1990-10-30/Debate-1.html

    “The President of the Commission, Mr. Delors, said at a press conference the other day that he wanted the European Parliament to be the democratic body of the Community, he wanted the Commission to be the Executive and he wanted the Council of Ministers to be the Senate. No. No. No.”

    Which can be seen here:

    http://www.youtube.com/watch?v=Tetk_ayO1x4

    Viviane Reding, vice president of the European Commission as reported on January 8th 2014:

    http://www.telegraph.co.uk/news/worldnews/europe/eu/10559458/We-want-a-United-States-of-Europe-says-top-EU-official.html

    “We need to build a United States of Europe with the Commission as government and two chambers – the European Parliament and a “Senate” of Member States.”

    Twenty-three years on, roughly speaking a generation, and exactly the same proposal is being advanced; since Thatcher rejected it outright item by item with her “No. No. No.” her successors as Prime Minister – Major, Blair, Brown and Cameron – have all played their part in allowing and assisting matters to move in that same direction; and does Cameron really believe that he can now reverse that process through renegotiation, and does he expect us to believe that he really wants to?

    • Chris
      Posted January 9, 2014 at 1:39 pm | Permalink

      Worth reading R North’s excellent summary of the Reding statements. He says it is nothing new, it has been stated before publicly, and politicians would have been aware of it. It seems that it is the media which is only just catching up (and presumably the electorate from whom this was apparently deliberately hidden until the advent of the internet made effective scrutiny of politicians possible).
      http://www.eureferendum.com/blogview.aspx?blogno=84610
      EU politics: I think we knew that

    • Brian Tomkinson
      Posted January 9, 2014 at 1:53 pm | Permalink

      Denis,
      The answers to your last two questions- No and No.

    • Brian Tomkinson
      Posted January 9, 2014 at 2:00 pm | Permalink

      Denis,
      Sorry, I meant to say No and Yes but I suspect he doesn’t give a fig what we think or want.

    • bigneil
      Posted January 9, 2014 at 5:08 pm | Permalink

      he doesn’t want to – and he is now realising WE KNOW – that’s why he is going the Blair route – – – LIE LIE AND MORE LIE. – -anyone would think he is in for a big “reward” for keeping us under the eurothumb – -and he is scared of losing his “bonus”.

    • Lifelogic
      Posted January 9, 2014 at 5:10 pm | Permalink

      Not a single person that I know has any faith that Cameron will even try to negotiate anything serious on the EU. He is merely a John Major who wears his underpants inside he trousers and can speak in full sentences. Usually saying the complete opposite to what he is actually enacting.

      “We have cut taxes” but he has make 299+ tax increases, “I keep my promises” – then he rats on the EU Cast Iron Promise and on Inheritance taxes. Anyway he could not even beat Brown when chucked the last election away. So it is all irrelevant. What will happen when he comes a poor third in May 14?

  28. rick hamilton
    Posted January 9, 2014 at 11:00 am | Permalink

    Nothing is being done about unemployment because the bureaucrats who run the EU are insulated from public opinion and care mainly about the survival of the banks, their own careers and the sacred ‘ever closer union’ project.

    The Politburo (sorry EU Commission) can afford to ignore what the people think because the link between voters and those in power has been deliberately broken by the structure of the EU. Voting for the Supreme Soviet (sorry MEPs) will make no difference. When national referendums are held the EU ignores unfavourable results and bribes the voters to try again for the approved result.

    In the unlikely event that British voters do get an in/out referendum the EU will chuck money at the UK until we all vote a second time in the correct way. After all, playing around with other peoples’ money is what politicians do best (sorry again, I don’t include you Dr Redwood).

    In the UK we can attack our politicians for their failures – not that it makes much difference – whereas hardly any ordinary voter knows who is responsible for what in the EU machine.

    In the end there will be some sort of revolt but I have no idea how bad things have to get before the people rise up against the unelected elites. Begging in the streets probably.

  29. Roy Grainger
    Posted January 9, 2014 at 11:04 am | Permalink

    History suggests that eventually this situation will result in extreme nationalist parties (they may be nominally either right- or left-wing) coming to power in the Eurozone. It is why I believe the UK will not be the first country to leave the EU.

  30. Denis Cooper
    Posted January 9, 2014 at 11:17 am | Permalink

    “The odd thing is the apparent acquiescence of so many voters so far in this dreadful situation”

    It’s not so odd when you recall that it has been made clear to people in those countries that a vote to solve the problem by leaving the euro will be treated as a vote to leave the EU altogether, with their country then being cast into outer darkness, not only deprived of subsidies and other financial support but also unable to trade with the EU member states, and with their leaders excluded from the so-called “top table” in Europe and so unable to influence decisions for their benefit.

    And you may also recall that back in 2010 when Merkel wanted an EU treaty change to legalise eurozone bailouts, and Cameron had that “golden opportunity” to insist that in return for his agreement to what Merkel wanted there must be other EU treaty changes, including one to provide a mechanism for a country to make an orderly withdrawal from the euro without having to leave the EU altogether, he chose instead to just give her that EU treaty change and ask for nothing substantive in return.

    And you may further recall that both Houses of our national Parliament approved that EU treaty change with few objections, and without anyone in Parliament seriously urging that it should be put to a referendum in this country even though we had been promised that in the future we would have referendums on EU treaty changes:

    http://www.legislation.gov.uk/ukpga/2012/15/contents

    “European Union (Approval of Treaty Amendment Decision) Act 2012″

  31. Dan H.
    Posted January 9, 2014 at 11:31 am | Permalink

    Rather than pontificate and analyse at length, might I simply make a few empirical observations for Western-style democracies?

    Life in EU, Euro-zone countries isn’t very nice.

    Life in EU, non-Euro countries is nicer.

    Life outside the EU is even nicer.

    Therefore, as Parliament are sworn to serve the people of this country with a view to making life nice for everyone, might it not be a good idea to transition the country to the way of life of the nicest countries we can observe?

  32. bigneil
    Posted January 9, 2014 at 12:02 pm | Permalink

    the program showing the unemployed immigrant who wanted to go back – but was prevented from doing so by bureaucracy here shows how bad things are – -when he got one side sorted -another stopped him from going – -how did he survive – -shoplifting – -do you think the govt depts who delayed his departure cared about the shopkeepers loss?? – -no – typical Britain – -” I sit behind a desk therefore I control what can happen – but I don’t care about the ACTUAL cost !

    waste waste waste

  33. Tad Davison
    Posted January 9, 2014 at 12:10 pm | Permalink

    I wish it were not the case, because I want the people of Europe to do better (with the British people to whom I am loyal in the first instance doing better still) but I can’t say these figures are shocking, because I believe they are an inevitable consequence of the way the EU works.

    Such deprivation always was predictable and that is proven by the fact that we’ve been saying so for forty years, but the thing that IS difficult to understand, is why the EU supporters either cannot see it, or worse still, can see it but won’t tell it like it is, and actually want yet more of this crap heaped upon us!

    It’s even more curious that it is predominantly the political left who seem to want ever closer union in spite of it crippling the lives of the very people they are supposed to support.

    But what is that telling us about Mr Cameron and the pro-EU wing of the Tory party?

    I would say at the very least, the entire EU system needs root and branch reform, yet despite seemingly acknowledging that fact, Cameron is still not telling us what he wants to do about it. If the EU cannot be reformed or will not allow itself to be reformed, the only way for Britain is out, and I would love to know why so many people seem unable to understand that. Time after time, they trot out the same old tired lies and misinformation which routinely gets demolished.

    As I have said many times on this blog, my own pro-EU Lib Dem MP, Julian Huppert, won’t even debate it with me for fear of losing the argument, yet he’s another who wants more of it – absolutely unbelievable! I have also said many times, that to deny debate is to deny democracy, so where is the ‘democratic’ factor in the title ‘Liberal Democrat’?

    So here’s an open challenge to any EU supporter, please tell us once and for all, how your vision of the EU will do anything other than fail.

    Tad Davison

    Cambridge

  34. Leslie Singleton
    Posted January 9, 2014 at 12:32 pm | Permalink

    Victorian Arithmetic–A proof (it is easier to start with the 3) is as follows, viz N = 3x where x is an integer but 3x is even, therefore x is even, call it 2y, so N = 3 X 2y = 6y QED. The actual question, which I have just dug out, was, verbatim, Show that if a prime number greater than 5 be increased or diminished by unity, one of the results is divisible by 6. I apologise to Paul Denver for omitting the (obvious!) “greater than 5″ . This was (part of) Question 9 in the Arithmetic Exam, Senior Students, in the University of Cambridge Local Examinations of Boys and Girls set on 12 Dec 1882. You should see the other questions!

    • bigneil
      Posted January 9, 2014 at 4:54 pm | Permalink

      but nowadays the same paper would have to be printed in 492 different languages/dialects – and if there was any spelling or grammatical errors in that paper the person it was intended for would sue for emotional trauma and get enough payout that they would not need the qualification after all.

  35. Max Dunbar
    Posted January 9, 2014 at 12:34 pm | Permalink

    The figures that you quote for unemployment in Spain are interesting. If half of all young people are without a job, and if it assumed that they are suffering real hardship, why is there no serious civil unrest? Desperate poverty and poor living conditions drove the Spanish to extremes in the 20s and 30s. Could this happen again, and if not, what prevents them from doing so?
    The crude figures alone appear not to tell the full story. Can you expand on this please?

    Reply I think a lot of them carry on living at home with their parents.

    • Martin Ryder
      Posted January 9, 2014 at 1:01 pm | Permalink

      I should imagine that the reason that the young are not rioting on the streets is mainly because they all have computers and play stations and are sitting at home venting their frustration by blogging and playing violent games.

      They probably also realise that none of the highly paid people that their parents are employing to run their countries have a clue about what should be done. Even if they did they couldn’t do anything, as whatever scheme they thought up would almost certainly be against EU rules, or USE rules once our Imperial Overlords get their way!

    • Chris
      Posted January 9, 2014 at 1:34 pm | Permalink

      It could be linked to the fact that in Spain unemployment has been coming down, I understand. This trend is expected to continue, provided the recent boost to tourism holds good:
      http://www.theleader.info/article/39706/spain/national/spanish-tourism-boost-brings-unemployment-down/

    • yulwaymartyn
      Posted January 9, 2014 at 2:53 pm | Permalink

      Max – see my post above. Also there are thousands of Spanish in my city in the UK doing jobs like care homes, waiters, cooks, and of course cleaners. In the summer they gather on the beach and play music as many Spanish seem to like our daylight evenings without the heat that you get in Spain. In winter they play football and tennis in the parks under the floodlights.

    • Martyn G
      Posted January 9, 2014 at 3:38 pm | Permalink

      Reply to John – you are correct – there has recently been a couple of ‘news’ items on TV about this i.e. interviews with young folk moving back into their parents’ house after becoming unable to afford to maintain their own accommodation. That said, I think Spanish families are much more inclined to retain their family group and identity than are we in the UK.

    • Richard1
      Posted January 9, 2014 at 9:34 pm | Permalink

      Apparently CO2 emissions in Spain are down c 20%. The huge subsidies for wind are given the ‘credit’ for this, and the fact that this green nonsense has been a major contributor to Spain’s insolvency is glossed over by environmentalists. Perhaps young people in Spain are content to live with high unemployment as the price of green virtue?

  36. Vanessa
    Posted January 9, 2014 at 12:41 pm | Permalink

    What better proof do we need that the European Union officials saved the EURO and sacrificed their people. They do not care one jot for their “people” and, like Hitler, are happy to destroy them as long as their dream is kept alive.

    Evidence they will never change anything in their Treaties and Britain should leave their evil, warped “club”.

  37. Leslie Singleton
    Posted January 9, 2014 at 1:10 pm | Permalink

    John–The acquiescence is not all that surprising and has absolutely nothing to do with Economics, Trade, World Power, whether Merkel likes Holland or anything whatsoever else, EXCEPT the fact that the people over there simply cannot believe that they under any circumstances would or should have to go back to carrying all the different original currencies, in particular the loose change. I have done no work on it and certainly haven’t got one of them links to point to but there must be a lot of people who (now more so than in the past) have to dodge back and forward over too many borders too many times for them to believe that it is impossible for one currency to apply. They are apparently prepared to pay any price. THE goal of the EU is to annihilate borders (“to stop pretending there are borders” as it was once put to me) so perhaps it is all not so surprising. The question, as always, is what has that to do with us?? We do have a border but don’t police it.

  38. Posted January 9, 2014 at 1:30 pm | Permalink

    JR hints at the cause of the problem when he points to the fact that Germany is competitive and has relatively low unemployment level. But JR doesn’t take that point to its logical conclusion, so I will.

    The root cause of high periphery unemployment is the divergence in competitiveness over the last decade or so as between core and periphery. That flaw was masked for a while by the housing bubble, but once the bubble burst, the flaw became obvious.

    I.e. the periphery won’t be out of trouble till it cuts costs, or does an internal devaluation (i.e. cuts wages and prices in the periphery). Wages and prices (relative to the core) are coming down in the periphery, but the process is painfully slow. In fact it’s so slow that if I were Spanish or Italian, etc I’d favour abandoning the Euro and going back to national currencies which are easy to devalue. (The UK devalued the pound by 25% in 2008, though that’s been largely reversed since 2008).

  39. forthurst
    Posted January 9, 2014 at 2:07 pm | Permalink

    “The odd thing is the apparent acquiescence of so many voters so far in this dreadful situation, and the complacency of the European establishment faced with this tragedy.”

    Complacency and much worse is the norm for political establishments anywhere, anytime. In addition, political establishments are not above lying to their constituents as to the causes of their malcontents and denying that there are better viable alternatives. They also like to dig in to prevent populist rivals emerging by maintaining unfair voting systems and blocking them from the MSM.

    Nevertheless, there does seem to be a nationalistic backlash against the EU establishment, including the pretend Eurosceptic parties like the British Conservatives, which the establishment likes smear as ‘extreme rightwing’.

  40. Robert Taggart
    Posted January 9, 2014 at 2:25 pm | Permalink

    Answer to the headline – Technology – is this not ‘the Elephant in the room’ ?…
    So many jobs can now be done by automation, machine, robot… there be increasingly less need to employ us humanoids. This has ofcourse been developing since the year dot !
    The big question has to be – Why has no solution been found that allows people to live and pay their way without employment ?
    Benefits – they should be the answer – they work for Moi !

  41. acorn
    Posted January 9, 2014 at 2:46 pm | Permalink

    The deficit hawks at the ECB are going in the wrong direction; “[...] the general government deficit for the euro area is projected to decrease from 3.7% of GDP in 2012 to 3.2% in 2013 and to decline further to 2.6% in 2014 and 2.4% in 2015. The projected lower deficit for 2013 reflects fiscal consolidation efforts in many euro area countries and a partial unwinding of government assistance to the financial sector”. That’s why unemployment is high.

    (Comments on Roman Catholic Church left out ed)

    the European political elite, principally ensconced in Brussels and Frankfurt, could also be characterised as (spinners ed) in the same mould. Their methods are more sophisticated and the dominant religion is now neo-liberalism with the economy as a deity that the common folk have to sacrifice and serve penance to. Not much has really changed.

  42. Denis Cooper
    Posted January 9, 2014 at 2:55 pm | Permalink

    An off-topic snippet:

    http://euobserver.com/tickers/122661

    “Denmark asks WTO to solve EU dispute with Faroe Islands”

    “EU member state Denmark Wednesday filed a request in Geneva for a WTO panel to solve a dispute between the Faroe Islands and the EU. The Faroese are not allowed to sell herring and mackerel in the EU as part of sanctions for fishing too much in the North Atlantic.”

    While the Faroese have had a large measure of self-government since 1948 Denmark still remains responsible for foreign affairs, and the Faroes are not part of the EU; so we have the rather weird situation where an EU member state is not keeping its attempts to settle a dispute between the EU and part of its own kingdom within the confines of the EU but instead is going outside the EU and inviting the WTO to find a settlement.

  43. John B
    Posted January 9, 2014 at 3:22 pm | Permalink

    The Single Market is the foundation upon which the EU is based and the very feature by which the EEC was sold to Europeans, and supporters peddle the EU.

    USA, UK are in themselves ‘single markets’.

    The essential features without which there can be no single market are: freedom of movement of goods, services, capital and finance, services and labour.

    The effect of this, and why it is so important, is that resources can be best allocated throughout the single economy not trapped in or excluded from any part of it.

    Why so much unemployment in the EU?

    Answer because it is not a Single Market. Talk about immigration curbs demonstrates the key principle of freedom of movement of anything is not accepted. Arguments for limiting free movement of labour, equally apply to the other key freedoms.

    It is true National Governments by subsidies, political pressure, patronage, regulation, taxation, welfarism, subterfuge are limiting freedom of movement of capital, finance, services and labour. Labour movement anyway is difficult compared with say the USA, because of language and culture.

    It is unlikely a Single Market will ever be possible because of National interests, cultural and language differences, and self-interests of politicians, workers, professions and others.

    Calls for the so-called United States of Europe on the face of it would appear to resolve the problem with a central government and the National Interest thereby eliminated, but there is no pan-European political parties, politics or language, culture or ‘demos’.

    Parliament and Executive will still represent the National differences… and there will be no democratic participation beyond voting.

    It must be clear to Europhile political claque that the Single Market is not, is never going to happen, and is not acceptable anyway given their recent calls for restrictions on the mobility of labour, so that means the EU is not about economic prosperity brought about by best allocated resources in a Single Market.

    So, what is it about?

  44. bigneil
    Posted January 9, 2014 at 4:48 pm | Permalink

    a few weeks before xmas I got talking to a Spanish chap at a roadside food/drink van – He was from Tenerife -trade there was so low him and his wife had come here -got 2 min wage jobs – just to make ends meet- friends back there would ring him when needed and they would go back to their home and work. He was about 50 yr old. – -So its not just the young. – – – -but with reports of Bulgaria, Romania and other countries selling EU passports to anyone – -the EU is no longer viable – and open to the world – -you cannot keep cramming more and more into a finite space called an island

  45. Posted January 9, 2014 at 5:28 pm | Permalink

    Disappointed that you also John fail to highlight the real problem of immigration, its not an immigration problem its a welfare & benefits problem!
    We need to take control of this issue, little point in talking about immigration until we do.

    • Denis Cooper
      Posted January 9, 2014 at 7:24 pm | Permalink

      No, it’s an immigration problem exacerbated by a welfare and benefits problem.

    • matthu
      Posted January 9, 2014 at 8:03 pm | Permalink

      It is not simply (or even mainly) a welfare and benefits problem. It is an education, housing, health, transport, employment, policing and crime problem.

  46. margaret brandreth-j
    Posted January 9, 2014 at 8:22 pm | Permalink

    We cannot have more and more people where there are less and less jobs and expect good employment figures.
    We cannot expect technology to save man power and then complain that there are not enough jobs.
    We cannot expect to squeeze the public sector , then complain that many are unemployed.
    We cannot expect the Country’s pensions to be either wiped out or dramatically reduced ,needing older people to work longer and still have job availability.
    What do they want a dream world where reverse logic works?

  47. uanime5
    Posted January 9, 2014 at 10:44 pm | Permalink

    The unemployment rate of 12.1% is much higher than the US at 7% and the UK at 7.4%.

    This is mainly due to countries such as Spain and Greece bringing up the average, which is why most eurozone countries have an unemployment rate below 12.1%.

    Croatia also has high unemployment (18.8%) despite not using the Euro.

    Worse still is the position of young people under the age of 25. 3.57 million are out of work in the Euro area.

    As the eurozone has a population of 333 million this equates to a ratio of 10.72 per 1000 people.

    As the UK has 1 million people under the age of 25 out of work and a population of 63 million this equates to a ratio of 15.87 per 1000 people. So by comparison the UK is doing worse than the eurozone in terms of youth unemployment.

    The rate of young person unemployment is a shocking 57.4% in Spain, 54.8% in Greece, 41.6% in Italy and 36.5% in Portugal. Even in France one in four young people are out of work.

    For comparison in 2012 the youth unemployment rate was 8.1% in Germany, 9.5% in the Netherlands, 19.8% in Belgium, 21% in the UK, 22.8% in the EU, 23% in the eurozone, and 30.4% in Ireland.

    Unemployment in the rest of the EU is lower than in the Eurozone, which suggests that some of the high level of unemployment is down to the features of the Euro.

    Unemployment in the 17 eurozone countries is 12.1%, while unemployment in the EU is 10.9%. As the difference is small the euro is unlikely to be having a major effect on unemployment levels.

    Unemployment is however, quite high throughout the EU on average indicating that all is not well with the policies pursued by the region. High regulatory costs and dear energy are two of the features that limit economic progress.

    Then why are these problems not effecting Germany or the Netherlands which are both in the Eurozone and the EU?

    It is extraordinary that over half of all young people under the age of 25 can be out of work in some countries, yet no major action is triggered likely to make a bid dent in the totals of the young unemployed.

    If half of the 25-65s were also unemployed then the level of youth unemployment would be average (though this would indicate other problems). I guess you need to compare the ratio of unemployed young people to unemployed 25-65 year olds to determine if there is a problem with youth unemployment or unemployment in general.

  48. Edward2
    Posted January 10, 2014 at 10:48 am | Permalink

    I know you love your EU and its ambition to bring us a socialist united state of europe but this latest post must have been a real struggle for you to come up with statistics that can be manipulated to give a positive spin on things.
    Like a new version of Winston Smith I can see you at some point in the future writing similar missives for the USE’s equivalent of the ministry of truth.

    • uanime5
      Posted January 11, 2014 at 12:35 am | Permalink

      Edward2 I wasn’t adding a positive spin, I was pointing out that the UK isn’t doing much better than the average EU country.

  49. Bazman
    Posted January 10, 2014 at 4:45 pm | Permalink

    Britains 20% or the thick end of a million youth unemployed can’t be ignored.
    http://www.parliament.uk/business/publications/research/briefing-papers/SN05871/youth-unemployment-statistics
    And the Tory government intends to cut housing benefit for the under 25’s many of whom have children. What does that tell you about Tory mentality? Everyone can live with their mums until they are 30 like they did and I did I must say on and off while I failed to find work or at least a foot hold. Not real and was it ever meant to be?
    If you are young and motivated you can go where the work is. Just motivated is often enough and what is the governments doing other than starvation tactics to promote this. A fair question you would think? The fault lies with the governments not the youth.
    This idea of self employed is all well and good, but all of them? In one place I worked I would banter with the Columbian toilet cleaner and his wife and still do if I meet them in town. Interesting to follow his fate and a shining example of low wage low work leading somewhere, now cleaning in a local hospital they told me in Waitrose last time I saw them, better car/house etc. Many never could and never will, but seem to able to tell us this is the answer!? How many have had the dead end job/bedsit? Credentials cut both ways. Ram it.

  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page