Tuesday, 8 January 2013

EUROPE:'' Eurozone Unemployment'': An alarming indicator

The euro crisis will morph into an European crisis in 2013. The survival of the common currency is not in question any longer, but European economies, after two years of crippling and contra-cyclical austerity, are stuck on flat.

Furthermore, the question is not so much whether any country will exit the euro but whether the further integration of the zone will lead to the exit or de facto ouster of a non-euro member from the European Union. In 2013, Europe is expected to be weakened by its economy and threatened in its unity. 
As an indicator to this forecast, the unemployment rate across the eurozone has reached a record high of 11.8 percent. Joblessness figures released Tuesady by Europen Union showed the rate for November 2012 had crept up a tenth of a percent in October of the same year.
The report shows nearly 19 million people were unemployed in the countries using the euro-currency in November, a rise of some 133,000 people from a month earlier. The report by the European statistics agency, Eurostat, also looked at annual figures. It said two million more people in the euro-zone were unemployed in November 2012 than November 2011.
The report also gave figures for an area comprising all 27 European Union members countries, including those which do not use the euro.  Across all EU members, the joblessness rate was 10.7 percent in November, with some 26 million men and women unemployed.
Based on this report, it is not surprising that powerful centrifugal forces are pulling non-euro members away from the EU. Some of them, such as the UK, never saw it any more than a one-dimensional “single market” in the first place. But if it ever comes to a choice between a smaller EU and a stronger monetary union, it’s easy to see what euro zone governments will choose. 2013 could be the year when that choice becomes clearer..
Even if euro zone leaders decide that the folly must stop, they are going to pay the price of two years of cult-like devotion to austerity: in the arsenal of measures deployed to save the euro, it’s the one thing that has failed to work.

European governments have created two bailout funds, rescued three euro members and recapitalised the banks of a fourth. They have restructured Greek debt twice. The ECB has poured cheap funds on the banking system, and it has promised to do “whatever it takes” to keep the common currency together.
Yet governments have undermined these efforts by obsessing about fiscal discipline - and it shows. After declining 0.4 percent in 2012, the euro zone’s economy as a whole is expected to stagnate this year. Official forecasts vary - but few lie outside the spectrum that stretches from mild shrinkage to paltry growth.

By Guylain Gustave Moke