Austerity Driving Eurozone Unemployment

Posted on March 5, 2012 at 2:30 pm by JM Ashby

If you’re looking for a living, breathing example of the consequences of imposing austerity in the middle of a recession, look no further.

Europe, who for some inexplicable reason embraced the sweaty palm of austerity over the past two years, is currently experiencing the highest level of unemployment in over a decade.

The Eurozone’s unemployment rate has hit 10.7 percent, according to Eurostat, the European Union’s statistics office, as several countries have adopted austerity measures that are choking economic growth. This is the highest level of unemployment since the Euro was adopted in 1999. As Bloomberg News noted yesterday, Greek austerity measures are “driving the economy deeper into a recession,” while economist Kenneth Thomas noted that “the four [European] countries that have had the most severe budget cuts have the highest unemployment rates.”

If the Republicans had their way, this is what we would be experiencing right now. Except America does not have a safety net as robust as Europe does, so for us the consequences would be far, far worse.

Fortunately President Obama has minimized the impact of the Republican’s austerity fetish and has offset and offloaded as much of the burden of their 2010 electoral victory, and American’s 2010 electoral malfeasance, for as long as possible.

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  • muselet

    The UK was the first to embrace austerity (voluntarily, no less) in 2010; GDP dropped by 0.5% in Q4 2010.
    http://capitalgainsandgames.com/blog/stan-collender/2118/fall-uk-gdp-creates-problems-us-gop

    As of last November:

    The budget deficit is about 10% of GDP and unemployment – officially 2.45 million (7.7%) – is at its highest level since 1994.

    Public anger over the cuts has grown. More than 250,000 people demonstrated in London on 26 March – the city’s biggest protest since the 2003 Iraq war.

    http://www.bbc.co.uk/news/10162176

    The Tories (and their Liberal Democrat coalition partners) must be so proud.

    Meanwhile, in Romania:

    The government proposed wage cuts of 25% and pension cuts of 15% last May to reduce the country’s budget deficit.

    There were protests and Interior Minister Vasile Blaga resigned after thousands of police officers went on strike over the 25% pay cut.

    Romania’s economy shrank more than 7% in 2009 and it needed an IMF bailout in order to meet its wage bill.

    http://www.bbc.co.uk/news/10162176

    Kevin Drum pointed out last month that Portugal has had austerity imposed on it by the EU and isn’t exactly thriving:

    As Portugal’s economy deteriorates, their debt levels become ever more unsustainable, requiring yet more austerity and tanking their economy even further. This is the same cycle happening in Greece (and Spain and Italy), and it’s not clear where it ends.

    http://motherjones.com/kevin-drum/2012/02/austerity-isnt-working-portugal-either

    I know Americans aren’t known for our keen understanding of the rest of the world—and Republicans aren’t known for their grasp of reality—but you’d kinda think someone would have noticed the correlation between austerity and really, really bad consequences for an economy (not to mention for the public). It’s remarkable that we’re still having this conversation.

    –alopecia

    • http://drangedinaz.wordpress.com/ IrishGrrrl

      The leaders of the GOP are only I interested in winning the election and if that means sabotaging our economy, they are ok with that. Austerity would perfect for derailing the current recovery and they know it. As for GOP voters…most of them don’t have a clue.

      • muselet

        Oh, I know the Rs want nothing other than to win the election, but austerity isn’t some new fixation for them: they’ve been bleating about it (though they haven’t used the word) for decades.

        The problem is that—here in the good ol’ US of A, at least—the only ones pointing out that austerity ends in tears are some Lefty bloggers. Our glorious news media as a whole haven’t had much to say about The Lessons We Can Learn From Europe (which wouldn’t be hard, all they’d have to do is transcribe reports from European news sites). Depressing, it is.

        –alopecia

    • http://www.politicalruminations.com/ nicole

      Well, hell, alopecia, we’re only “still having this conversation” because the Republicans aren’t in power.

      • muselet

        Sadly, true (although see my reply to IrishGrrrl above).

        –alopecia

        • http://drangedinaz.wordpress.com/ IrishGrrrl

          Well let’s just add it to the increasingly long list of things the MSM fails to report. Heck the sky could be falling and they’d ignore that too, distracted by some starlet who flashed a nipple during primetime tv or by a “he said/she said” fight on a Fox political show, or that droopy jowled ass McConnell and his weepy orange sidekick Boehner bemoaning the deficit……and the American people sit there and wonder why things seem to be falling apart. I’m feeling tired and cynical. Time for me to go to bed.