The worst is over???
This (total) collapse has really only just begun.
– Spain youth unemployment reaches record 56.1% (Guardian, Aug 30, 2013):
Number of young Spaniards belonging to ‘lost generation’ is up 2% since June, despite government claims that the worst is over
Youth unemployment in Spain has reached a new high of 56.1%, a quarter of the 3.5 million under-25s jobless across the eurozone, according to the latest Eurostat figures.
The number of young Spaniards belonging to what has become known as the lost generation is up 2% since June to 883,000. Only Greece has a higher percentage of young people out of work, at 62.9%.
Among adult males, Spain has the highest unemployment at 25.3%, higher even than Greece. Despite the government’s claims that the worst has passed and that employment reforms will encourage firms to hire, the figures suggest it will be a long time before any upturn in the economy is reflected in a declining jobless rate. With the holiday season coming to a close, the numbers are likely to rise as workers on seasonal contracts go back on the dole.
With close to six million Spaniards out of work, unemployment is so entrenched that there was no political reaction to the latest figures, neither from government nor the opposition. Indeed, mentioning the economy at all has become virtually taboo across the political spectrum. Meanwhile, Spaniards and recent immigrants are deserting the country in search of work, with 500,000 leaving in 2012, 60,000 of them Spanish nationals, most of them to Latin America and Europe.
The total number of unemployed across the eurozone is 19.2 million, 15,000 fewer than in June. Across the EU the figure was 26.7 million, down 33,000 from June. However, it has remained at a record rate of 12.1% for the fourth months. The overall rate across the eurozone is 11%, half a percentage point up on last year.
Italy saw a small fall to 12%, while the lowest rates among member states are Austria (4.8%), Germany (5.3%) and Luxembourg (5.7%). The rate in the US is 7.4% and in Japan 3.8%.
As the continent still grapples with the effects of the financial crisis five years on, a board member of the German central bank warned that the European financial system is still not equipped to cope with a bank failure of a similar magnitude to 2008’s collapse of Lehman Brothers.
“If we had a Lehman 2.0 tomorrow, which I don’t see, we still wouldn’t hold the tools we designed to wind down banks globally effectively in our hands,” said Andreas Dombret of Germany’s Bundesbank.
Some progress had been made and the system is now safer than in 2008, but implementation is slow, said Dombret, who is in charge of the financial stability portfolio on the German central bank’s board.
He added: “More than anything, we have bought time with a number of unconventional measures. That’s why financial markets are currently calm, but it doesn’t have to stay like that forever.”
The bankruptcy of US investment bank Lehman plunged the global financial system into crisis, leading to a raft of new rules aimed at making banks’ business less risky to avoid taxpayer-funded rescues.
The European Central Bank’s vow a year ago to do “whatever it takes” to preserve the single currency, the euro, took some heat out of the debt crisis, but it also eased pressure on struggling eurozone countries to reform, according to Dombret.