News / Europe

Shrinking EU Economies Deepen Austerity Divisions

Shrinking Economies Turn Tide Against Austerity in Europei
X
April 26, 2013 9:00 PM
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.

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

US Imposes Sanctions on Alleged Honduran Drug Gang

Treasury department alleges Los Valles group is responsible for smuggling tens of thousands of kilograms of cocaine into US each month More

At 91, Marvel Creator Stan Lee Continues to Expand his Universe

Company's chief emeritus hopes to interest new generation of children in superheroes of all shapes and sizes by publishing content across multiple media platforms More

Photogallery New Drug Protects Against Virus in Ebola Family

Study by researchers at University of Texas Medical Branch, Tekmira Pharmaceuticals is first looking at drug's effectiveness after onset of symptoms 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.
African Media Tries to Educate Public About Ebolai
X
George Putic
August 20, 2014 8:57 PM
While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.
Video

Video African Media Tries to Educate Public About Ebola

While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.
Video

Video Ferguson Calls For Justice as Anger, Violence Grips Community

Violence, anger and frustration continue to grip the small St. Louis suburb of Ferguson, Missouri. Protests broke out after a white police officer fatally shot an unarmed black teenager on August 9. The case has sparked outrage around the nation and prompted the White House to send U.S. Attorney Eric Holder to the small community of just over 20,000 people. VOA’s Mary Alice Salinas has more from Ferguson.
Video

Video Beheading Of US Journalist Breeds Outrage

U.S. and British authorities have launched an investigation into an Islamic State video showing the beheading of kidnapped American journalist James Foley by a militant with a British accent. The extremist group, which posted the video on the Internet Tuesday, said the murder was revenge for U.S. airstrikes on militant positions in Iraq - and has threatened to execute another American journalist it is holding. Henry Ridgwell has more from London.
Video

Video Family Robots - The Next Big Thing?

Robots that can help us with daily chores like cooking and cleaning are a long way off, but automatons that serve as family companions may be much closer. Researchers in the United States, France, Japan and other countries are racing to build robots that can entertain and perform some simpler tasks for us. VOA’s George Putic reports.
Video

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As the Ukrainian military reclaims control of eastern cities from pro-Russian separatists, residents are getting a chance to rebuild their lives. VOA's Gabe Joselow reports from the town of Kramatorsk in Donetsk province, where a sense of fear is still in the air, and distrust of the government in Kyiv still runs deep.
Video

Video Five Patients Given Experimental Ebola Drug Said to Be Improving

The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video China Targets Overseas Assets of Corrupt Officials

As China presses forward with its anti-graft effort, authorities are targeting corrupt officials who have sent family members and assets overseas. The efforts have stirred up a debate at home on exactly how many officials take that route and how likely it is they will be caught. Rebecca Valli has this report.
Video

Video Leading The Fight Against Islamic State, Kurds Question Iraqi Future

Western countries including the United States have begun arming the Kurdish Peshmerga forces in northern Iraq to aid their battle against extremist Sunni militants from the Islamic State. But there are concerns that a heavily-armed Kurdistan Regional Government, or KRG, might seek to declare independence and cause the break-up of the Iraqi state. As Henry Ridgwell reports from London, the KRG says it will only seek greater autonomy from Baghdad.
Video

Video In Rural Kenya, Pressure Builds Against Female Circumcision

In some Kenyan communities, female genital mutilation remains a rite of passage. But activists are pushing back, with education for girls and with threats of punishment those who perform the circumcision. Mohammed Yusuf looks at the practice in the rural eastern community of Tharaka-Nithi.

AppleAndroid