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

Video One Year After Thai Coup, No End in Sight for Military Rule

Since carrying out the May 22, 2014 coup, the general has retired from the military but is still firmly in charge More

Goodbye, New York

This is what the fastest-growing big cities in America have in common More

Job-Seeking Bangladeshis Risk Lives to Find Work

The number of Bangladeshi migrants on smugglers’ boats bound for Southeast Asian countries has soared in the past two years 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.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs