‘Europe loses whole generations as youth among the hardest hit by record-high unemployment’
“The huge amount of austerity is being implemented. We have a
very clear divide between the North and the South in unemployment, but also in growth. We are
only three months into the new year and the growth has already been
downgraded in most of the clubs mid-countries and similarly we have
seen that even countries in the core like Holland now seeing growth
coming off. It’s a combination of bad economics, and a lack of
reforms and inability to create new jobs,” Steen Jakobsen told
It would be very tempting to draw the conclusion that the austerity measures don’t work, but it’s how they’re being implemented that needs redress according to Jakobsen.
“You need legal measures of austerity but also to work on supplies out of the economy. This means that you need to work on creating better framework for creating jobs which is normally to do with lower tax rate, lower bureaucracy, access to funding, which remains the main obstacle for growth in Europe overall. Reports show that peripheral countries pay much higher net margin price for borrowing money than anybody else. So it’s extremely difficult to access the credit market and it only accentuates the issues we have at hands.”
Only by 2015 will the situation in Europe likely stabilize and some improvements might be seen, Jakobsen estimates.
“We need to move from policy of ‘wait and see while kicking the cane down the lane’ and actually implement reforms with deals, with the ability to create jobs and that needs to come from the microside of economy and not from macroside. Everything we get right now is macro and more macro only leads to bankruptcy and not to improvement of the economy.”
In the wake of Cyprus’ financial drama and its bail-in arrangements based around a state-led savings grab, new hopes are being place in real estate and stocks, notes Jakobsen.
“Effectively, stocks have become a refugee for the loose
money in terms of policy. So I think this needs to end, too,
because you have to remember that at the end of the day the
corporation needs to finds the in-customers. The in-customers among
others are people who are in unemployment queue and that queue is
getting bigger day by day.”
Europe is one of the richest societies in the world, but to date has largely failed in getting to grips with a crisis that’s lingered for years, leaving a social dilemma as youth unemployment remains alarmingly high. The situation is critical and needs to be addressed urgently, Jakobsen believes.
“Because being unemployed is not only the fact that you lose
your income but a lot of people also lose integrity in their own
opinion. And that is what is sad, because we already lost one
generation of Spanish youth and the problem grows bigger month by