I don’t know how many stories I can do just showing statistics of the Eurozone to prove that austerity in a depressed economy is disastrous. But while they’re boring to me creatively, they’re important to build an unassailable fact pattern, one that stresses how backward Eurozone (and U.K.) fiscal policy has become.
Unemployment in the euro zone reached its highest level in almost 15 years in February, with more than 17 million people out of work, and economists said they expected job office queues to grow even longer later this year.
Joblessness in the 17-nation currency zone rose to 10.8 percent – in line with a Reuters poll of economists – and 0.1 points worse than in January, Eurostat said on Monday.
“We expect it to go higher, to reach 11 percent by the end of the year,” said Raphael Brun-Aguerre, an economist at JP Morgan in London. “You have public sector job cuts, income going down, weak consumption. The economic growth outlook is negative and is going to worsen unemployment.”
For all the faults of US fiscal policy, we have not engaged in anything as profoundly stupid as this, try as policymakers might. The only near-term policy on the horizon in the Eurozone and U.K. is more austerity. Spain just introduced their austerity budget. The fiscal pact signed by all Eurozone nations calls for budget targets that force more austerity. The poverty of thinking there and in the U.K. is almost incredible.
Associated with that is the way in which much of the media turned away from Europe as soon as the banking crisis lessened in impact. Once the threat of default subsided, and the only suffering fell on millions of ordinary European citizens, suddenly the news fell off the front page. And this lack of global pressure is unquestionably very helpful to the Eurozone leaders implementing their austerity policies.
The only hope of anything useful to come out of this mess is as an object lesson. That’s why the story of the austerity-induced Eurozone recession must never be forgotten.