WARNING! We Are Heading For A âEuro Shockâ Again: The EU Is Realizing That Collapsing Economies Canât Pay What Is Owed, Employment Hastens Downward Spiral, Germany Holds Its Own Elections In September, Wonât To Be Too Supportive If Italy Asks for Help!
March 14th, 2013
Recession Replaces Debt as Top EU Worry Amid Joblessness
The EU is realizing that collapsing economies canât pay what is owed.
European leaders are loosening the economic shackles once demanded by Germany as the recession and mounting unemployment in southern Europe shove aside the debt crisis as the euro areaâs biggest headache.
A two-day Brussels summit starting today will endorse plans for âstructuralâ assessments of national budgets, according to a draft statement, using code for granting countries such asFrance, Spain and Portugal extra time to bring down deficits.
The 17-nation currency region will follow last yearâs 0.6 percent contraction by shrinking 0.3 percent in 2013, the first back-to-back decline since the euroâs debut in 1999, the commission forecasts. It sees bloc-wide unemployment at 12.2 percent in 2013, with joblessness as high as 27 percent in Greece and 26.9 percent in Spain.
Pressure remains on France, Italy and the countries tapping emergency financial aid to make their economies more productive by reducing labor costs and deregulating professions. The commission, the Brussels-based enforcer of the budget rules, fended off attacks from southern Europe that it has been too strict and parried warnings from northern Europe that it is becoming too lax.