Euro-zone official says Europe's surging jobless rate will create a social crisis

Discussion in 'Wall St. News' started by makloda, May 5, 2009.


    Looks like EUR Zone (2008: "Ve do not haw a krysis") is in for another early 1990s "jobless recovery" period

    The euro-zone's top economy official said Monday that Europe was "heading toward a social crisis" as unemployment rates rocket to a postwar record.

    The European Commission predicted earlier that the jobless rate in the 16 nations that use the euro would climb to 9.9 percent this year and 11.5 percent next year — the highest since the Second World War.

    Luxembourg Prime Minister Jean-Claude Juncker, who led regular talks between euro-zone finance ministers on Monday, said the loss of millions of jobs would trigger a social crisis that would put millions of Europeans "into a state of despair."

    "We cannot underestimate the explosive effect of such an economic crisis," he told reporters. "We're going to have to do some long and hard thinking about our social model and whether it's on the right track."

    European governments face mounting public debt and deficits as they face rising social welfare costs to cover unemployment and health care benefits — and lower tax revenues to support them.

    Juncker urged companies not to lay off people prematurely saying "European firms should be aware of that responsibility" and should instead cut workers' hours.

    The EU forecasts Spanish unemployment will rise to 20 percent — with one in five workers unable to find a job — while the jobless rate in France and Britain will climb over 3 million next year.

    Germany, the region's largest economy will shed 1.5 million jobs this year and next year, it says, with some 8.5 million jobs disappearing across the 27-nation EU over two years.
  2. Right on cue.....:(
  3. And the U.S. now has over 13 million (officially) unemployed and 11 million underemployed.

    Those are official figures, so it's entirely clean to factor an additional 25% that official measurements fail to pick up, so that would put us at 16.25 million unemployed and 13.75 million underemployed - right now.

    I would not discount the likelihood of 15-17 million unemployed, officially, within the next 12-18 months, officially, and if we see 16 million underemployed, that's a roughly 30 million chunk of the population without a job or working part time (who want to work full time).

    There are going to be societal problems in this country, just like in much of the rest of the world, because of economic weakness.
  4. I don't doubt your figures and so what amazes me is the passivity amongst the US population to date.

  5. The shit has yet to hit the fan!!!!!
  6. AK100


    It's simple, they've been conditioned to not think beyond tomorrow or the end of the week at the latest.

    So right now with stocks going up all is good, the economy is recovering and there's only blue sky ahead :)
  7. I am inclined to follow your reasoning AK100.
    However it seems to me that the markets have de-coupled from the US main street economy and may have de-coupled from the fundamentals as well.
    If rising Indexes can be offered to the US creditors (Chinese etc) in lieu of rising interest rates, the maybe US can still have it's cake and eat it too ... at least in the near term.
    The sudden focus in clamping down on tax havens makes me think that this is the case.

  8. Europe is toast - the new EU countries from the East had a much, much bigger credit & property bubble than the USA, as did the UK, Ireland, Spain etc. Unemployment is much worse for the EU because of their gigantic welfare payments for unemployed people, it will crush their fiscal position and cause ballooning budget deficits and debt levels. Many of the countries are only 10-15 years out of 2nd/3rd world conditions so the potential for riots, government collapses, and even wars is far greater.

    IMO E Europe is going to kick off in the next year or so, and when it does, look out below on the Euro. Markets have a serious blind spot about this.
  9. There are 13 million unemployed now, fellas, with another 11 million Americans looking for full time work.

    15-17 million unemployed within 12 to 18 months is not at all impossible; in fact, some may claim it's potentially likely.

    First, let us break down the numbers:

    Civilian Labor Force: 154,048,000

    Unemployed: 13,161,000

    Part-time for economic reasons: 9,000,000

    Marginally attached to labor force: 2,100,000

    Total unemployed, part-time, and marginally attached: 24,261,000

    Unemployment rate using above metrics: 15.7 percent[/i]

  10. I don't make predictions about the market, but it feels very bubbly to me lately. Are things really 30% better than they were at the beginning of March? I can't come up with a good argument for that.

    Rising unemployment generally means predictions of lower revenue by businesses and lower earnings by extension - hardly an economic recovery.
    #10     May 5, 2009