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Spain and France Facing Huge Unemployment

Economics / Unemployment May 05, 2013 - 10:25 AM GMT

By: Submissions

Economics

Brett Chatz writes: No end is in sight regarding the current rise in unemployment in Spain and France.  Neither does there appear to be any economic panacea to reverse the European recession.  As in spread betting and contract for difference, the end product of the austerity program is determined by the accuracy of the European wager on diminishing national deficits rather than on addressing the unemployment problem. CFD trading is making an impact on share trading decisions, just as the economic outlook of the ECB impacts monetary decisions within individual countries.


Spain

Over six million individuals in Spain are unemployed.  The specifics of that unemployment are frightening.  A massive 27% of the entire work force have no jobs with which to put food on their table.  This is a record jobless rate for the entire history of the country.  Consumer confidence is at an all-time low, as spending cuts by the government reach into every sector of the economy. 

The greatest share in the unemployment rate is being shouldered by young workers in their early twenties, and by residents located in the southern portion of Spain.  Due to an enormous deficit, forcing further government cuts, the unemployment rate continues to rise unabated.  

A full 57% of all non-students younger than 25 years of age are out of work.  Many are blaming the unprecedented employment outlook in Spain on the austerity program put into place by the European Central Bank.

The overall economy of Spain decreased 1.9% in 2012.  Growth is not anticipated to happen until 2014, or at best the tail end of 2013.  Economic experts do not expect an employment turn-around until Spain shows a sold 1% in growth.  That type of increase is not envisioned to occur until mid-2014.  2,000,000 unemployed workers will have experienced a jobless existence for over 36 months by the time that Spain is expected to significantly improve its economic forecast.

Europe’s highest budget deficit was recorded by Spain in 2012.  The country continues to grapple with deficit goals established by Brussels, to the extent that unemployment is expected to rise further.

The Europe-wide recession is forcing the International Monetary Fund and European Central Bank to re-evaluate Spain’s deficit goal, presently set at 4.5% of Gross Domestic Product (GDP).  Further depleting household monetary power, in addition to the upward trend in unemployment, is a combination of increased taxes on sales and earnings along with falling salaries.  A struggle to pay monthly expenses is presently experienced by 30% of Spain’s families.

Mariano Rajoy, the prime minister of Spain, has developed a program that he asserts is aimed to retain current spending cuts, while improving the country’s growth.  That balance is essential.  Whether or not Rajoy can succeed in maintaining such a balance remains to be seen.
France

An all-time record in the jobless rate is likewise occurring in France.  In March of 2013, 3,200,000 people were unemployed.   This is exactly the situation that President Francois Hollande, a socialist, had vowed to avoid.  A decrease in domestic demand is occurring hand in hand with falling exports.  Those two factors are establishing an ongoing instability in the French economy.

The automotive industry in France has been substantially damaged.  Renault expects to terminate the employment of 7,500 workers within the coming three years.  During that same time period, PSA Peugeot Citroen anticipates a job termination of 10,000 workers.  Looking toward 2016, neither car manufacturer foresees a return to significant economic growth.

Hollande has established as his national priority, the re-employment of millions of workers.  He is attempting to enlist the entire country in furthering that goal.  As with Spain, the achievement of an economically healthy decrease in the jobless rate is yet to be accomplished.

Author’s Bio:
Brett Chatz was born in Johannesburg, Gauteng, South Africa. He attended the internationally accredited University of South Africa, where he completed the prestigious Bachelor of Commerce degree, with Economics and Strategic management as his major subjects. In concert with the primary degree, he completed several Bachelor of Arts courses, most notably English poetry and literature. Nowadays Brett contributes informative essays for the globally renowned spread betting and CFD trading provider, InterTrader.com.

© 2013 Copyright Brett Chatz - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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