Eurozone austerity could leave 4.5m jobs at risk
The United Nations has warned the Eurozone that they could lose 4.5million jobs in the next four years if they continue to adhere to austerity measures.
The International Labour Organization (ILO) said that unemployment could rise from 17.4million to almost 22million in participating euro nations, unless an immediate policy shift “out of the austerity trap” and towards job creation was adopted to steer the 17 nations out of an oncoming crisis.
The report, ‘Eurozone job crisis: Trends and policy responses’, produced by the ILO, states: “Without a prompt policy turn – to address the crisis and to regain the trust and support of workers and enterprises – it will be difficult to implement the reforms necessary to put the Eurozone back onto a path of stability and growth.”
It added that young people were more vulnerable to the austerity measures adopted by the Eurozone. Currently, youth unemployment stands at 22% in the Eurozone as a whole, hitting southern countries such as Italy, Portugal, Greece and Spain particularly badly. In Greece and Spain, the rate stands at more than 50%.
The report emphasises the impact of austerity measures on unemployment rates above other repercussions, reading: “In a depressed macroeconomic context, these reforms are likely to lead to increased numbers of layoffs without any boost to job creation at least until economic recovery gathers momentum.”
But despite the cautionary report, the Spanish prime minster today announced massive cuts and rise in taxes totalling €65billion (£51.2billion) in order to meet the bail-out conditions. This new wave of austerity will see the hike in sales tax from 18% to 21%, while public administration will see losses of €3.5billion.
The recent austerity plans have caused backlash among the Spanish public, especially miners who have gathered in the Spanish capital to demonstrate against the government’s policies.
Experts have also criticised Spain’s austerity measures, fearing that the Spanish economy is being driven deeper into recession as a result.