May 03 2012
Time for Investment in Jobs
Unemployment is the most pressing issue in the European Union right now – it is ruining peoples’ lives.
Unemployment in the eurozone rose to 10.9 per cent, up from 10.8 per cent in February, according to figures published by Eurostat today. Even worse though: youth unemployment is standing at 22.1 per cent. And although in the wider European Union the jobless rate was stable at 10.2 per cent, unemployment was up in 19 out of 27 member states compared with a year ago.
To tackle unemployment, the EU should pump more resources into the regeneration of the traditional industrial heartlands of Europe. We also need a greater emphasis in education and putting as many young people as possible through university. We must also prioritise vocational skills.
High unemployment is not just the consequence of falling demand but of a number of factors, the main one being the reduction in investment in Germany. The speed and depth of the cuts that Germany is insisting upon is causing a real social and political backlash from France to the Netherlands and across the continent. This accounts for the18 per cent of the vote won by Marine Le Pen’s far-right National Front in the first round of the French presidential elections, the fall of the pro-austerity Dutch government, and the “bloody nose” expected by mainstream parties in Greece when the country goes to the ballot on Sunday. The continent is witnessing a wave of anti-austerity protests on May Day yesterday.
Looking in from the outside, the Canadian finance minister Jim Flaherty said eurozone countries had to define a “comprehensive and credible blueprint” for recovery. Explaining his country’s decision not to make an extra contribution to the International Monetary Fund when it sought to boost its lending power last month, he said the eurozone had “sufficient resources to tackle its sovereign debt crisis” but there had been an “unwillingness to commit them”.
Rising unemployment in periphery countries is worrying but unsurprising, The eurozone is almost suffering from a second successive GDP decline in the first quarter of 2012 and is headed for a further contraction in the second quarter, and with overall eurozone business confidence taking a renewed appreciable downward lurch in April.
The European Commission has published a paper setting out ideas for boosting employment in the EU. The Commission paper emphasised employment in health, information technology and green energy. These should be vital growth sectors, and should enjoy reduced employment taxes by switching these taxes onto pollution, property and consumption.
In order to meet the EU’s 2020 target, 17.6 million new jobs will need to be created before the end of the decade – let’s get started now!