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

Lion Cecil's Killing Sparks 'Canned Hunting' Debate in S. Africa

Conservationists believe incident, which triggered worldwide outrage, will reshape debate about practice in which hunters are allowed to target animals bred for hunting More

US Urges Taliban to Stay With Afghan Peace Talks

Top US Afghan diplomat also meets with Pakistani, Afghan officials following news of Mullah Omar's death More

Environmentalists Issue Warning on Mekong Biodiversity

Scientists say decades of economic development, hydropower-dam construction, lax law enforcement and trafficking have taken their toll 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.
Astronauts Train Underwater for Deep Space Missionsi
|| 0:00:00
...    
🔇
X
George Putic
July 30, 2015 8:59 PM
Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Astronauts Train Underwater for Deep Space Missions

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Civil Rights Leaders Struggled to Achieve Voting Rights Act

Fifty years ago, lawmakers approved, and U.S. President Lyndon Johnson signed, the Voting Rights Act of 1965. The measure outlawed racial discrimination in voting, giving millions of blacks in many parts of the southern United States federal enforcement of the right to vote. Correspondent Chris Simkins introduces us to some civil rights leaders who were on the front lines in the struggle for voting rights.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Hometown of Boy Scouts of America Founder Reacts to Gay Leader Decision

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.
Video

Video 'Metal Muscles' Flex a New Bionic Hand

Artificial limbs, including the most complex of them – the human hand – are getting more life-like and useful due to constant advances in tiny hydraulic, pneumatic and electric motors called actuators. But now, as VOA’s George Putic reports, scientists in Germany say the future of the prosthetic hand may lie not in motors but in wires that can ‘remember’ their shape.
Video

Video Russia Accused of Abusing Interpol to Pursue Opponents

A British pro-democracy group has accused Russia of abusing the global law enforcement agency Interpol by requesting the arrest and extradition of political opponents. A new report by the group notes such requests can mean the accused are unable to travel and are often unable to open bank accounts. VOA's Henry Ridgwell reports.
Video

Video 'Positive Atmosphere' Points Toward TPP Trade Deal in Hawaii

Talks on a major new trade agreement among 12 Pacific Rim nations are said to be nearing completion in Hawaii. Some trade experts say the "positive atmosphere" at the discussions could mean a deal is within reach, but there is still hard bargaining to be done over many issues and products, including U.S. drugs and Japanese rice. VOA's Jim Randle reports.
Video

Video Genome Initiative Urgently Moves to Freeze DNA Before Species Go Extinct

Earth is in the midst of its sixth mass extinction. The last such event was caused by an asteroid 66 million years ago. It killed off the dinosaurs and practically everything else. So scientists are in a race against time to classify the estimated 11 million species alive today. So far only 2 million are described by science, and researchers are worried many will disappear before they even have a name. VOA’s Rosanne Skirble reports.
Video

Video Scientists: One-Dose Malaria Cure is Possible

Scientists have long been trying to develop an effective protection and cure for malaria - one of the deadliest diseases that affects people in tropical areas, especially children. As the World Health Organization announces plans to begin clinical trials of a promising new vaccine, scientists in South Africa report that they too are at an important threshold. George Putic reports, they are testing a compound that could be a single-dose cure for malaria.
Video

Video 'New York' Magazine Features 35 Cosby Accusers

The latest issue of 'New York' magazine features 35 women who say they were drugged and raped by film and television celebrity Bill Cosby. The women are aged from 44 to 80 and come from different walks of life and races. The magazine interviewed each of them separately, but Zlatica Hoke reports their stories are similar.
Video

Video US Calls Fight Against Human Trafficking a Must Win

The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.
Video

Video Washington DC Underground Streetcar Station to Become Arts Venue

Abandoned more than 50 years ago, the underground streetcar station in Washington D.C.’s historic DuPont Circle district is about to be reborn. The plan calls for turning the spacious underground platforms - once meant to be a transportation hub, - into a unique space for art exhibitions, presentations, concerts and even a film set. Roman Mamonov has more from beneath the streets of the U.S. capital. Joy Wagner narrates his report.
Video

Video Europe’s Twin Crises Collide in Greece as Migrant Numbers Soar

Greece has replaced Italy as the main gateway for migrants into Europe, with more than 100,000 arrivals in the first six months of 2015. Many want to move further into Europe and escape Greece’s economic crisis, but they face widespread dangers on the journey overland through the Balkans. VOA's Henry Ridgwell reports.
Video

Video Stink Intensifies as Lebanon’s Trash Crisis Continues

After the closure of a major rubbish dump a week ago, the streets of Beirut are filling up with trash. Having failed to draw up a plan B, politicians are struggling to deal with the problem. John Owens has more for VOA from Beirut.
Video

Video Paris Rolls Out Blueprint to Fight Climate Change

A U.N. climate conference in December aims to produce an ambitious agreement to fight heat-trapping greenhouse gases. But many local governments are not waiting, and have drafted their own climate action plans. That’s the case with Paris — which is getting special attention, since it’s hosting the climate summit. Lisa Bryant takes a look for VOA at the transformation of the French capital into an eco-city.

VOA Blogs