A Decade Later
A decade since the great crash of 2008, unemployment is still a problem in some areas of Europe. Most notable are Greece, Spain and Italy; Greece of course the most severe with an unemployment rate of over 20%. We discussed in an earlier article that the idea that Europe needs migrants to fill the demand for labour is absurd. Europe is not facing a labour shortage – merely an issue with matching the location of the employer and the worker.
EU Average Versus The Eurozone Average
The average unemployment in the entire European Union is 7.4%. For the Eurozone this is slightly higher with an average of 8.8%. This implies that the non-Euro countries within the European Union have a lower average unemployment than the Eurozone countries. This brings to doubt the benefits of the Euro as it was intended to increase trade and thereby improve the overall economy.
*Note that the data observed here is from October 2017 and has been seasonally adjusted. The numbers do not take into account those that are discouraged from looking for work or those that have work in part-time jobs and would like to work more hours. On a European level this could add 6% on top of the 7.4%, creating a combined figure of 13.4%.
Devaluing The Currency
The table shows us a well known problem for shared currencies. Individual nations may require individual currencies to allow them to move in their own direction. Germany has a roaring economy with an unemployment of 3.6% – devaluing the currency for Germany only increases their demand for labour.
German products would become relatively cheaper for foreign buyers paying with different currencies. It would, of course, reduce the amount of products Germans can buy from abroad. By increasing export and reducing import, it creates a greater trade imbalance.
On the other side of the coin you have Spain, Greece and Italy. All three used to have currencies that frequently devalued and were known to be ‘weak‘ currencies. Now, none of them can devalue their currencies anymore to increase their exports. The decision has been taken out of their hands as it is centralized in the European Central Bank in Frankfurt.
The Question Remains…
Of course none of this is really new information. The issues with the Euro being a ‘one-size-fits-none‘ approach are well known and documented. Nevertheless, the EU politicians have been remarkably quiet on the topic over the last decade. We may remark that ten years is more than enough time to start a serious debate on the usefulness and effectiveness of the Euro.
The Euro Is Required For The Union
However, the debate is limited to the economists. The one and only obvious solution to the problem is the return to national currencies. Yet, it appears that is exactly what the Eurocrats do not want to happen. A return would confirm that there has been a mistake in launching the Euro. Moreover, it would confirm that never-ending integration of Europe without looking back, may not be the best approach to take.
Admittance of guilt would not only jeopardize the Euro currency, it would jeopardize the entire EU project. This may tell us something about the European leaders. The suffering of those unemployed is a price worth paying to continue the journey to the Utopian fully integrated European Union.
It also raises the question whose interests the European Union is supposed to serve. Apparently, it is not the interests of the people living in Europe.