Home > Uncategorized > Euro economies: still out of kilter

Euro economies: still out of kilter

unemployment

According to Eurostat, unemployment differences in the EU are still large (graph). Especially the euro countries do bad. The Netherlands and Germany seem to buck this trend but this must be ascribed to whopping surpluses on their current accounts. As not all countries can, by definition, run current account surpluses at the same time (my surplus is your deficit) this means that total domestic demand in the Euro Area is way to low. Another option: people are working too much and have to retire earlier or (my preference) take more time off. Anyway, Euro economies are either out of kilter because of high unemployment or because of extreme current account surpluses.

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