EuroZone job crisis: trends and policy responses: "By April 2012, the Eurozone unemployment rate reached 11 per cent, representing 17.4 million jobseekers.
If the current policy course does not change quickly, however, it is possible that a further 4.5 million jobs will be lost over the next four years. This would risk further feeding social unrest and eroding citizen’s confidence in national governments, the financial system and European institutions."
ILO: "The study warns that without a shift in policy direction all countries in the Eurozone – both those currently under stress and their healthier counterparts – will suffer.
“It’s not only the Eurozone that’s in trouble, the entire global economy is at risk of contagion,” said ILO Director-General Juan Somavia.
According to the report, austerity has resulted in weaker economic growth and a worsening of banks’ balance sheets, leading to a further contraction of credit, and consequently lower investment and more job losses.
To move out of the austerity trap, the report recommends:
Repairing the financial system conditional on resuming credit to small firms. Making shareholders pay for the bailouts would not only be fair but also reduce the need for taxpayers money or further austerity measures.
Promoting investment and supporting jobseekers, especially for young workers. A “youth guarantee”, at a cost estimated at less than 0.5 per cent of the Eurozone’s government spending could be quickly implemented. To fund this, there is a case for refocusing European Structural Funds and mobilizing the European Investment Bank.
Addressing differences in competitiveness between Eurozone countries. This opens up a new opportunity for social dialogue to ensure that i) labour incomes grow in line with productivity in the stronger economies; ii) income moderation in deficit countries is complemented with policies to boost the industrial base; and iii) a downward spiral in wages and worker rights is prevented."
CommonDreams: "Following Barclays' Scandal, Stiglitz says 'Send Bankers to Jail'
Without threat of prosecution, says Nobel economist, expect little to change
Nobel Prize winner and former World Bank economist Joseph Stiglitz has called recent revelations that Barclays and other large banks colluded to defraud their costumers by artificially leveraging international interest rates a "textbook illustration" of how banks use privileged information and lax oversight to reap rewards for themselves while savaging the wider societies in which they operate."
Joseph Stiglitz: "But the relevant question is the politics in Germany. Have they created a in their rhetoric a dynamic that makes it difficult to stop. In particular Merkel’s rhetoric that the crisis was caused by profligacy. You know Spain had a surplus, Ireland had a surplus. Every belt tightening, the economy goes down and the results are disappointing. It’s been one tightening of the belt after another. The adjustments have been unprecedeneted. She’s hoisted herself on her own petard. She’s framed the issue as profligacy, rather than framing it as “the European system is fundamentally flawed”. We have a banking system that’s backed by each government. A banking system that is backed by its own government is state aid. Germany is providing more state aid than Ireland, than Spain, because Spain can’t. Money is going to flow to the banking system with more state aid. So it’s a violation of the basic principle of Europe. She has not recognised this yet."
CommonDreams: "The tax rate for those making over $1 million (1.3 million euro) will be 75% come 2013
As he promised throughout his presidential campaign, Francois Hollande on Wednesday introduced a new 2012 corrective budget that calls for, among other measures, a one-off tax levy on the nation's wealthiest individuals and large corporations to help address the nation's current financial woes."