In another sad dispatch from the front lines of the European crisis, Bloomberg’s Maria Petrakis yesterday looked at the plight of Greece’s underemployed, focusing on the travails of the folks who still have jobs in a country where the unemployment rate is now 26.8 percent. To many, the general outlines of the issues here will be familiar to those who’ve followed several months of reports from Spain and Greece (and some of the countries where Greeks have gone to look for work).
Stories like this are a constant reminder of the gulf between European policy makers and beleaguered citizens, like those now on strike in Greece. While the European debt crisis might have eased, the unemployment crisis certainly has not–just look at the map below, taken from Bloomberg’s European Debt Crisis Monitor. European policy makers might push for austerity and deregulation, but politicians look at the unemployment numbers (as they should). That’s why even as austerity-friendly a government as that of Mariano Rajoy has balked at further cuts in services and business taxes.
The implicit promise from policy makers here is that if Greece and Spain get with the program, they’ll be like Ireland and things will get better. The difficulty in this argument is that (a) the unemployment numbers are much higher in Greece and Spain than they ever were in Ireland and (b) they are getting worse. That last part is the biggest difference. When Ireland first announced austerity plans at the end of 2010, the unemployment rate was 14.9 percent.
That’s roughly where Ireland’s unemployment rate stayed for a year, never rising above 15.1 percent (it’s down to 13.6 percent now). Compare that to Spain, where the unemployment rate was at around 20 percent when the country first passed spending cuts in 2010, and is at 26.9% now. Or to Greece, where the unemployment rate has jumped 4 percentage points since the controversial austerity plan that brought down George Papandreou’s government.
The sad thing here is that some of the deregulatory measures that European policy makers want are by no means stupid. It’s just hard to get ordinary folks to support economic liberalization when they’ve gotten to think of it as a synonym for rising unemployment and a disappearing safety net.