Huge Cracks in Global Recovery Thesis; Industrial Production Unexpectedly Drops in Germany, France; UK Weaker than Expected
Before taking a look at industrial production, let’s take a look at how uneven the jobs recovery has been.
The New York Times reports A Jobs Recovery Is Happening Faster for Some Countries Than Others
THE financial crisis and the severe recession that followed destroyed jobs in every industrialized country. While many countries have started to recover, in only one major one, Germany, has unemployment declined to a level lower than it was in September 2008.
When the downturn began, Germany had about 25 percent of the population in the euro zone and a similar share of the unemployed workers. Its population share is about the same now, but it has only 17 percent of the unemployed.
If the euro zone were a fiscal union rather than just a monetary one, there would have been automatic subsidies through unemployment benefits and other programs for the weaker areas. If there were easy labor mobility in the zone, more workers would have moved to Germany. If there were separate currencies, the German mark would have appreciated against the other European currencies.
As it is, none of that happened. Many Germans resent the need to bail out other countries, and many people in those countries resent being forced to cut wages and payrolls in the name of restoring competitiveness
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