Home > Uncategorized > Employment in selected Eurozone countries. No austerity or neoliberal miracles

Employment in selected Eurozone countries. No austerity or neoliberal miracles

In case you missed it: Greece has to accept all the measures, which will increase unemployment to at least 30% and possibly 35%, lead to unprecedented amounts of dirt poor old people while 50 billion worth of assets is stacked away in a fund which is mainly meant to recapitalize the banks (surprise!) to be able to negotiate about a deal. This is not yet the deal itself (personal: as I see it there is literally a sadistic element to these measures). Mind that Greece knows next to no unemployment benefits while the number of elderly is rising rapidly. Austerity is of course supposed, by some, to be some kind of miracle cure. But is it? No. None of the Eurozone austerity countries did well, when we look at employment. And neither did Denmark or the Netherlands which before 2008 did everything right, aqccording to the neoliberal rulebook. Private debt fuelled growth, government surpluses, flexible labour markets etc. etc.  At this moment, the Netherlands even have something like a 13% of GDP surplus on the current account (Q1, 2015). Despite this employment growth disappointed…. 


Why these countries?

Germany did, after about 1995, not have a large increase of private debt and a house price bubble, the main difference between this country and Denmark-The Netherlands.

The Baltics (Estonia, Latvia, Lithuania), Ireland and Finland are prime examples of private debt financed bubbles, which were not ´solved´ (as should have happened) by right sizing banks and writing down debts during the bust but by blackmailing these countries to prioritize zombie debts and zombie banks. The ´stock´ economy (i.e. the stock of debts) took precedence over the flow economy (work,income, profit, wages, production, consumption, investment)

The southern European countries were (except for Italy) characterized by large inflows of capital, monstrous current account deficits (like the Baltics, by the way) and a sudden stop of this inflow, which was possible because the Target2 system enabled banks to offload their southern European financial assets to the public domain. Spain is special as, contrary to other countries, average work weeks actually increased after 2008 while the participation rate of women continued to rise, which led to an extra/ordinary rise in unemployment (and which does show the dynamism of the Spanish labour market)

The Netherlands, Denmark: see above.

The Netherlands and Denmarksee above , not work.

  1. Marko
    July 13, 2015 at 10:57 am

    It looks like the eurozone leaders messed up – why is German employment doing so well ? They need to drive Germany into the same ditch with everyone else – beef up that reserve army of labor , ‘ya know ?

    I’ll be heartbroken if the Greek gov’t submits to this humiliation. Please , vote “Oxi” once again , folks. Leave that stinking euro cesspool. It’ll be a rough ride for a while , but at least you’ll maintain your self-respect , and your children and grandchildren will be forever grateful for your courage and foresight.

    • merijnknibbe
      July 13, 2015 at 12:28 pm

      German employment is doing well because of a decline of average hours worked. After 2008, this was caused by ´Kurzarbeit´, i.e. a collective decision to decrease the working week. After 2010 it seems to have been caused by individual decisions to work shorter hours (on average). Last time I checked (about 6 months ago) the average number of hours did however ot decline anymore.

    • merijnknibbe
      July 13, 2015 at 1:55 pm

      This is what happened in Germany: average hours of full time jobs hardly changed, after 1991. Average hours of part/time jobs slightly increased (!) after 2005. However, as most new jobs were part/time jobs average hours per job considerable decreased… https://www.destatis.de/DE/ZahlenFakten/Indikatoren/QualitaetArbeit/Dimension3/3_1_WoechentlicheArbeitszeit.html

  2. July 13, 2015 at 11:04 am

    What does 4 per. Zw. gem Stan for?

    • merijnknibbe
      July 13, 2015 at 12:25 pm

      4 period running average. At home, I have the Dutch version of Excel

  3. Paul Schächterle
    July 13, 2015 at 5:12 pm

    Excuse me, but what is the employment measure and where is the data from? Thanks!

    • merijnknibbe
      July 13, 2015 at 10:56 pm

      Total employment (male + female), measured in jobs, 2002 Q1 =100, Eurostat (one person can have more than one job).

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