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.