The European Conundrum: Stagnation, Massive Unemployment and Rising Debt - Despite Austerity

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The European Conundrum: Stagnation, Massive Unemployment and Rising Debt - Despite Austerity

Tuesday, 04 November 2014 09:58
By C.J. Polychroniou, Truthout | News Analysis


New data reveals, as we will show below, that Europe is the sick man of the global economy once again. But more to the point, it is high time to acknowledge that the European Monetary Union (EMU) is, for all practical intents and purposes, no longer viable.

Ever since the latest global financial crisis begun in 2008, Europe's monetary union is mired in a severe economic crisis from which it is simply unable to recover. For starters, the euro crisis has had a devastating impact on the peripheral eurozone countries (Greece, Portugal, Ireland, Spain, Italy and Cyprus), and it consolidated even further the division between north and south, thus putting permanently to rest illusive notions like convergence and cohesion inside the EMU.

The crisis management approach adopted on their behalf by the core euro-zone countries - Germany in particular - made things much worse. The so-called "rescue plans" enforced by the troika of the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF) for the crisis-ridden euro member states (Italy excluded) ravaged the southern economies as the harsh austerity policies administered caused massive declines in domestic demand and sharp rises in long-term unemployment, brought about brutal cuts in social programs and public investments, and resulted in rapidly declining standards of living and large-scale migration.

GDP in Spain, Portugal, Ireland, and Italy is on the average 7 percent below the pre-crisis levels; Greece's GDP is nearly 25 percent below its pre-crisis peak. The latest Eurostat data show that the unemployment rates in the peripheral countries are stratospherically high, indicating that there is no recovery. In Greece the official unemployment rate is over 26 percent while in Spain it is nearly 25 percent. In Portugal it is 14 percent, in Italy 12.3 percent, and in Ireland (the country with the highest net migration level in Europe) at over 11 percent. ................(more)

The complete piece is at: http://www.truth-out.org/news/item/27178-stagnation-massive-unemployment-and-rising-debt-despite-austerity-the-european-conundrum