Originally published November 8 2012
One-quarter of Spain and Greece workers without work as unemployment and debt continue to skyrocket
by J. D. Heyes
(NaturalNews) As bad as the U.S. economy has gotten, things are worse in Spain and Greece, as the entitlement-heavy economies of both nations further implode, relegating tens of millions of their citizens to what could become a generation of abject poverty.
The unemployment rate in both countries stands at about 25 percent, a figure that in and of itself is bad enough, but one that becomes even more daunting when you learn that fully 50 percent of younger workers in these nations are jobless, The Atlantic reported recently. Jobless youth tend to create unrest.
Moreover, these figures are not improving. In fact, they're getting worse "by leaps and bounds with each new report out of Europe," the online magazine said.
According to Eurostat, the European Union agency that tracks economic, employment and other related statistics, Greece's unemployment rate is growing exponentially, climbing a staggering eight percent since July 2011. Spain has kept up, as its official unemployment has risen to 25.8 percent, a continent-wide record. Meanwhile, job creation is stagnant as both countries remain in a recession that analysts believe will get worse before it improves.
They watched their neighbors shrink, protest, burn
With such high unemployment and poorly performing economies, the one bright spot is that the Eurozone's inflation rate, at 2.5 percent in October, is falling.
Or is it?
"There's a saying among companies, especially start-ups, that the metrics you pay most attention to move in the direction you'd like, so, the key is focusing the right metrics. It's the same with central banking, really," writes Derek Thompson, The Atlantic's senior editor.
He says that for most of its current economic crisis, the continent's central bankers were "fixated" on rates of inflation, but the real problem for the EU's periphery nations - Greece, Spain and Portugal - was sagging growth and rising unemployment.
Instead of implementing inflationary policies to help them become competitive again, the strongest EU nations, led by Germany, instead prescribed austerity plans, then "watched their neighbors shrink and protest and burn," Thompson wrote.
Then, two months ago, the European Central Bank came up with a scheme to save the euro, the EU currency, by pledging to buy unlimited amounts of debt to drive down interest rates in the most troubled countries.
That may have worked as a temporary stopgap for the rich EU nations, but the policy has done nothing to help those in the most dire straits.
10-year bonds in Portugal and Spain are slipping, while unemployment continues to rise while economic growth contracts.
Economic crisis causing independence push in Catalonia
For a time, some analysts on the continent advocated that Greece, Spain, Portugal and, to a lesser extent Ireland, leave the euro, lest they drag down its value so far that it would become worthless (sound familiar, dollar fans?).
But the Central Bank's promises staved off those calls.
For now.
But the troubled countries aren't out of the hot water yet.
In Catalonia, for example, Spain's most wealthy region - a region which generates one-fifth of the country's economic output and is home to 16 percent of the population, there are calls of independence, and that has the government in Madrid nervous.
In September, more than half of Catalans said they supported an independent state, though most admit it would be a slow, arduous process, if it were to happen at all.
"It's going to be a difficult and long process ... For us to get it they would have to have a referendum, and they're not going to give us that," Jose Maria Prats, a nurse who joined hundreds of thousands of marchers in Barcelona recently, to push for independence.
The push comes from the perception that the country's leaders are responsible for draining the region - and the country - financially.
Sources:
http://www.theatlantic.com
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
http://epp.eurostat.ec.europa.eu
http://www.reuters.com
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