Unemployment and growth in Latin and Northern Europe

Niall Ferguson:

having a monetary union without any of the other institutions of a federal state is proving to be a disastrously unstable combination. The paradox is that monetary union is causing Europe to disintegrate—the opposite of what was intended. According to the IMF, GDP will contract this year by 4.7 percent in Greece, 3.3 percent in Portugal, 1.9 percent in Italy, and 1.8 percent in Spain. The unemployment rate in Spain is 24 percent, in Greece 22 percent, and in Portugal 14 percent. Public debt exceeds 100 percent of GDP in Greece, Ireland, Italy, and Portugal. These countries’ long-term interest rates are four or more times higher than Germany’s. Perhaps the most shocking symptom of the crisis on the so-called periphery is youth unemployment. In Greece and Spain, more than half of all young people are out of work…

In the north European “core” of the euro zone, however, the picture is completely different. Unemployment in Germany is 5.4 percent. In the Netherlands and Austria it is even lower. These economies are growing. Their governments have no difficulty borrowing. The phrase “two-speed Europe” hardly does justice to the bifurcation. There are in fact now two Europes

One Response to “Unemployment and growth in Latin and Northern Europe”

  1. Jason Says:

    I guess they need John Edwards over there.

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