The EU has no vacancies

As defined by the International Labour Organis-ation, unemployed workers are those who are currently not working but are willing to work and able to do so and who expect to get paid for doing so. They should be currently available for work and have actively searched for, or are searching for, work.

It seems we are just buying time with our money
- Neville Curmi

It is frightening today when one looks at the current unemployment statistics throughout the world to find that policies do not seem to be working and are not creating opportunities for a willing labour force to find a decent job and earn a living. Most especially so in Europe.

What must be more frustrating is that although overall unemployment statistics seem to be the highest since the 1929 depression, it is on the youth section that the world has been hit the most, and here statistics are even more depressing. It is here that the future of one’s country lies. It is here that the exuberance of youth surges forward, full of dreams and fantasy of what the world could be all about and full of energy ready to follow a career in their own favourite sector.

How depressing it must be for a young person to have gone through university and graduated to find that work, even though the person is qualified, has become an elusive Cinderella!

The statistics in the table certainly prove a point where young people in Spain and Greece suffer most, with 50 per cent of them unable to work. In Ireland, Italy and Portugal it is over 30 per cent. Even France, Cyprus and Bulgaria are suffering with an unemployment rate of over 25 per cent.

As can be clearly seen, Malta stands four square outside the danger zone. A weak euro would, in some way, have favoured the strong European exporters, notably Germany. However, because our economies have become so tightly knit commercially, China, which was leading the world, has found it difficult to export at the same levels because its main markets, namely the US and Europe, were having a tough time and not buying as much as they had been.

So, great China has also to reduce its own imports. And so we go around. There seems to be no end to this spiral. In the past, when each country was looking after its own economy, a country in trouble could devalue its currency and chart its way through cheaper prices. There is no such joy today in Europe, where the euro is holding together.

On the other hand, while quantitative easing has certainly poured oil on troubled waters, it has only bought time. If one’s hands are tied because of the volume of debt one has to pay, how can one do one’s best to work harder and produce? We are applying a yardstick which is the same for all euro countries. What is right for one may well be wrong for another.

Higher taxes and cuts in capital spending may not be the answer. This is particularly so now in France, too, where they are increasing their taxes to reduce the deficit. Hence labour trouble. It seems we are just buying time with our money and hoping for the best, with no charted territory to go through. No land in sight. In this storm, take no chances. It is good to remain alive.

Curmi & Partners Ltd are members of the Malta Stock Exchange and licensed by the MFSA to conduct investment services business. This article is the author’s objective and independent opinion. It is based on public information and should not be viewed as investment advice in any manner. The value of investments may fall as well as rise and past performance is no guarantee of future performance.

Mr Curmi is a director at Curmi & Partners Ltd.

Seasonally Adjusted Unemployment Rates (%)

Totals Youth (U-25’s)

August 2011 April 2012 August 2012 August 2012
EU Average 17 10.2 11.2 11.4 22.8
EU Average 27 9.7 10.3 10.5 22.7

Bulgaria 11.1 12.2 12.5 29.4
Cyprus 8.0 11.1 11.7 26.9
France 9.6 10.1 10.6 25.2
Germany 5.8 5.6 5.5 8.1
Greece 17.2 22.7 24.4 55.4*
Ireland 14.7 14.7 15.0 34.7
Italy 8.4 10.6 10.7 34.5
Malta 6.2 6.1 6.5 16.6
Portugal 12.7 15.4 15.9 35.9
Spain 22.0 24.4 25.1 52.9
Japan 4.3 4.6 4.1 8.1
UK 8.0 7.9 8.0 * 21.0*
USA 9.1 8.1 8.1 16.8
Source Eurostat
* Relates to June 2012.

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