Europe needs to swap austerity for growth
Source: Agencies |
May 3, 2012, Thursday
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Print Edition
Print Edition
RECORD high unemployment for the 17 countries that use the euro is set to increase the pressure on Europe's leaders to switch from a focus on austerity to a pro-growth strategy to stop the region from moving deeper into recession.
Unemployment across the 17-member eurozone rose by 169,000 in March, official figures showed yesterday, taking the rate up to 10.9 percent in March - its highest level since the euro was launched in 1999.
The rate was up from 10.8 percent in February and 9.9 percent a year ago, and reflects the downturn in the eurozone economy as governments pursue tough austerity measures to deal with their debts - nearly half the countries in the eurozone, including Spain and the Netherlands, are now officially in recession.
The seasonally adjusted figures from European statistics office Eurostat are likely to ratchet up the pressure on the region's policymakers to introduce more pro-growth measures alongside the spending cuts and tax increases they have already implemented in an attempt to fix their debt crisis.
"The question is how long EU leaders will continue to pursue a deeply flawed strategy in the face of mounting evidence that this is leading us to social, economic and political disaster," said Sony Kapoor, managing director of Re-Define, an economic think-tank.
European Central Bank president Mario Draghi has spoken of the need for a "growth pact" in Europe and Francois Hollande, who is tipped to beat President Nicolas Sarkozy in France's presidential runoff on Sunday, has said he would renegotiate the eurozone's austerity-focused fiscal agreement to include more pro-growth measures.
Austerity has so far been Europe's main policy response to the debt problems afflicting many countries. It's been pushed hard by Germany, Europe's biggest economy, as a way to convince markets and international investors that the region has a grip on the problem.
However, analysts have pointed out that Germany may change its stance as there are already indications that its economy may struggle this year.
Unemployment across the 17-member eurozone rose by 169,000 in March, official figures showed yesterday, taking the rate up to 10.9 percent in March - its highest level since the euro was launched in 1999.
The rate was up from 10.8 percent in February and 9.9 percent a year ago, and reflects the downturn in the eurozone economy as governments pursue tough austerity measures to deal with their debts - nearly half the countries in the eurozone, including Spain and the Netherlands, are now officially in recession.
The seasonally adjusted figures from European statistics office Eurostat are likely to ratchet up the pressure on the region's policymakers to introduce more pro-growth measures alongside the spending cuts and tax increases they have already implemented in an attempt to fix their debt crisis.
"The question is how long EU leaders will continue to pursue a deeply flawed strategy in the face of mounting evidence that this is leading us to social, economic and political disaster," said Sony Kapoor, managing director of Re-Define, an economic think-tank.
European Central Bank president Mario Draghi has spoken of the need for a "growth pact" in Europe and Francois Hollande, who is tipped to beat President Nicolas Sarkozy in France's presidential runoff on Sunday, has said he would renegotiate the eurozone's austerity-focused fiscal agreement to include more pro-growth measures.
Austerity has so far been Europe's main policy response to the debt problems afflicting many countries. It's been pushed hard by Germany, Europe's biggest economy, as a way to convince markets and international investors that the region has a grip on the problem.
However, analysts have pointed out that Germany may change its stance as there are already indications that its economy may struggle this year.
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