Trinidad and Tobago Newsday EU unemployment hits record high YUSUFF ALI Thursday, June 6 2013 I was asked recently why I attach so much importance in this column to the European Union (EU). The answer is simple. The EU imports more goods from TT than from any other country in the Caribbean. In the first three quarters of last year, the 27 member states of the EU imported more than US$1.5billion worth of goods from TT. And that is not the whole story. This figure represents a sharp decline from the same period in 2011 when EU imports from TT amounted to almost US$2.2billion. So you will understand why I feel that when, for example, EU unemployment soars to a record high of close to 20million people, it can have repercussions for TT and we ought to really sit up and take notice. If you are struggling in TT to find a job, or if you know someone in that situation, you will no doubt have some sympathy for those 20 million. Youth unemployment among them is particularly bad, reaching a devastating 24.4 percent – meaning that one in every four Europeans under the age of 25 who want work cannot find a job. As for individual EU countries, the situation looks even worse. The jobless rate among young Greeks reached 62.5 percent while 56.4 percent of young Spaniards and 40.5 percent of Italian youth are out of work. Anatoli Annenkov, senior European economist at French bank Societe Generale, said such countries are at risk of losing a generation who will never find work. He added, “This raises the spectre of resentment against the euro, triggering a break-up of the single currency bloc.” Senior European politicians seem to be in despair. French president Francois Hollande said the situation could lead to the breakdown of Europe. He added, “Citizens are turning their backs on Europe as well as on the European project”. German finance minister Wolfgang Schaeuble said European unity “is at risk”. And Italian labour minister Enrico Giovannini said, “We have to rescue an entire generation of young people who are scared.” The jobless figures have come only days after the Organisation for Economic Co-operation and Development (OECD) slashed its forecasts for the eurozone economy. It now expects it to shrink by 0.6 percent this year, far worse than the 0.1 percent slide previously predicted. The European Central Bank (ECB) has cut interest rates to a record low of 0.5 percent (matching the Bank of England rates) in a bid to spur the economy into life. But the OECD has called on the ECB to do more to salvage a “dire situation”. As it turns out, the ECB is actually meeting today and will discuss how it could go beyond an interest rate cut to deal with the problem. Its president, Mario Draghi, already protected the eurozone from breakup last year by pledging to buy bonds of governments in trouble. Pier Carlo Padoan, chief economist at the OECD, believes that the eurozone’s lingering woes are the key risks to a global recovery. He called on the ECB to adopt money-printing policies as other central banks around the world have done, including the Bank of England. Martin van Vliet, an ING Bank economist, said, “An end to eurozone unemployment is not yet in sight. Indeed, the European Commission’s business survey remains at levels consistent with further increases in jobless figures…The labour market is likely to remain dismal until next year.” Analysts say the ECB is likely to take further measures to shore up lending to small and medium-sized businesses, which are currently not taking out loans for fear of a worsening economy and because banks are charging high rates of interest. EU leaders have pledged to do whatever it takes to shore up the euro. But it is hard to see how the eurozone can have any sort of long-term future if it cannot provide jobs for its young people. European Council president Mario Draghi has said he recognises that youth unemployment is one of the most pressing issues for the 27-nation EU. This raises the question, “If European economies are performing so badly that jobless figures, especially those for young people, continue to rise, what are the prospects for the future of TT’s exports to the EU?”
Posted on: Fri, 07 Jun 2013 12:51:47 +0000
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