News / Europe

Shrinking EU Economies Deepen Austerity Divisions

Shrinking Economies Turn Tide Against Austerity in Europei
X
April 26, 2013
France and Spain have revealed record unemployment figures as the economic crisis in Europe shows little sign of ending. As Henry Ridgwell reports from London, the relentless cycle of poor economic data appears to be turning the tide of opinion in Europe against the austerity measures that were imposed to rein in government debt.

Relentless cycle of poor economic output may be turning tide of opinion against European austerity measures.

TEXT SIZE - +
Henry Ridgwell
— Alongside Germany, France has been in the driving seat of European integration, but figures released Thursday show over 3.2 million French are jobless, and further cuts are looming.
 
Carmaker Citroen announced the closure of its factory in Aulnay-sous-Bois outside Paris, and Steel giant ArcelorMittal has begun mothballing furnaces.
 
In contrast, the biggest hiring announcement came from the national employment agency, Pole Emploi.
 
"GDP declined approximately 1 percent since the financial crisis started in 2008," said Philippe Brossard of investment group AG2R La Mondiale, adding that employment is declining at approximately the pace of GDP.
 
With both France and Spain revealing record unemployment figures, and a European economic crisis that shows little sign of ending, the relentless cycle of poor economic data appears to be turning the tide of opinion in Europe against the very austerity measures that were imposed to rein in government debt.
 
But the lack of growth has divided opinion: French President Francois Hollande — backed by many southern European leaders and the International Monetary Fund — blames excessive austerity, or government spending cuts, for the continent's economic stagnation, while German and European Central Bank (ECB) officials say governments must continue to pay down their debts.
 
Amid anti-austerity protests across the continent, European Commission president José Manuel Barroso said this week that austerity had reached its limit of popular support, a view echoed by Olli Rehn, EU Commissioner for Economic and Monetary Affairs.
 
"This slowing down of the pace of fiscal consolidation has been made possible by three factors: first, the increased credibility of fiscal policy which euro-area member states have achieved since 2011; second, the decisive action the ECB has taken to stabilize markets; and third, the reform of EU economic governance."
 
Simon Tilford, chief economist at the Center for European Reform, a London-based think-tank, there is a growing acceptance that austerity hasn't worked.
 
"Lots of European countries are chasing their tails," he said. "They are cutting public spending at a time when businesses are not investing, and consumers are not consuming."
 
An easing of austerity does not mean a sudden change in big government spending, says Tobias Blattner, chief European economist at Daiwa Capital Markets, the investment banking arm of Japanese brokerage Daiwa Securities Group.
 
"Everybody still wants and thinks that fiscal consolidation should be the aim and is exactly the right policy," he said. "But I think, as the European Commission president said, this should be done at a much slower pace in order to ensure social cohesion."
 
Meanwhile, Spain's unemployment figures have reached more than six million, over 27 percent of the workforce — the highest since the country's transition to democracy in 1976.

You May Like

Algerians Vote in Presidential Election

There were few media reports of protests and clashes around the country, but so far no significant violence More

Sharks More Evolved than Previously Thought

The discovery could “profoundly affect our understanding of evolutionary history” More

Pakistan Military Asked to Protect Polio Workers

Request comes as authorities say a Taliban ban on vaccinations in 2012 and deadly attacks on anti-polio teams have prevented thousands of children from getting inoculated More

This forum has been closed.
Comment Sorting
Comments
     
by: JKF from: Ottawa, Canada
April 27, 2013 10:55 AM
The poor economic situation, in the EU, extends beyond just Spain and France, all the Mediteranean countries and Eastern block countries are seeing rapid declines. Portugal, Ireland, even the UK are also experiencing declines. All these countries are producers that are not competitive with the global level producers. In the EU, when all the internal markets were opened, Germany one of the global level producers rapidly deciminated the producers in the smaller EU countries. Most of those smaller producers were geared for supplying the internal makets of their own countries; they were less efficent and did not produce massive outputs. The smaller countries, upon joining the EU did not prepare for the onslaught of cheaper goods produced mainly by Germany. Small industries, like nascent car, machinery, shipbuilding, railroad equipment, electrical machinery, test equipment, milk, cheese, other foods, even the small farms businesses, rapidly lost their markets. Such loss of markets has created massive unemployment. All the good employment has evaporated. In most cases, people will need to move to Germany to get good paying jobs. When markets are opened, the global level producers can easily outcompete the small producers, creating massive social problems, as we see in the EU, and even in North America. This economic model is a failure, that will lead to cathastrophic unrest all over the globe, because of massive unemployment, especially amongs the youth. Greed rather than social responsibility runs this failed model. If production is not shared, just like markets are shared, many countries will collapse, and lead to/into civil wars.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Google Buys Drone Companyi
|| 0:00:00
...
 
🔇
X
George Putic
April 15, 2014
In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Ray Bonneville Sings the Blues and More on New CD

Singer/songwriter Ray Bonneville has released a new CD called “Easy Gone” with music that reflects his musical and personal journey from French-speaking Canada to his current home in Austin,Texas. The eclectic artist’s fan base extends from Texas to various parts of North America and Europe. VOA’s Greg Flakus reports from Austin.
Video

Video Millions Labor in Pakistan's Informal Economy

The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed. VOA's Sharon Behn reports from Islamabad on how the informal sector impact's the Pakistani economy.
Video

Video Passover Celebrates Liberation from Bondage

Jewish people around the world are celebrating Passover, a commemoration of their liberation from slavery in Egypt more than 3,300 years ago. According to scripture, God helped the Jews, led by Moses, escape bondage in Egypt and cross the Red Sea into the desert. Zlatica Hoke reports that the story of the Jewish Exodus resonates with other people trying to escape slave-like conditions.
Video

Video Police Pursue Hate Crime Charges Against Kansas Shooting Suspect

Prosecutors are sifting through the evidence in the wake of Sunday’s shootings in a suburb of Kansas City, Missouri that left three people dead. A suspect in the shootings taken into custody is a white supremacist. As VOA’s Kane Farabaugh reports, he was well-known to law enforcement agencies and human rights groups alike.
Video

Video In Eastern Ukraine, Pro-unity Activists Emerge from Shadows

Amid the pro-Russian uprisings in eastern Ukraine, there is a large body of activists who support Ukrainian unity and reject Russian intervention. Their activities have remained largely underground, but they are preparing to take on their pro-Moscow opponents, as Henry Ridgwell reports from the eastern city of Donetsk.
Video

Video Basket Maker’s Skills Have World Reach

A prestigious craft show in the U.S. capital offers one-of-a-kind creations by more than 120 artists working in a variety of media. As VOA’s Julie Taboh reports from Washington, one artist lucky enough to be selected says sharing her skills with women overseas is just as significant.
Video

Video UN Report Urges Speedier Action to Avoid Climate Disaster

A new United Nations report says the world must switch from fossil fuels to cleaner energy sources to control the effects of climate change. The Intergovernmental Panel on Climate Change released the report (Sunday) following a meeting of scientists and government representatives in Berlin. The comprehensive review follows two recent IPCC reports that detail the certainty of climate change, its impacts and in this most recent report what to do about it. VOA’s Rosanne Skirble has the details.
AppleAndroid