This is a deeply worrying but must-read article from the FT, citing latest research from the ECB. Check it out!
via Double digit unemployment predicted even if eurozone recovers – FT.com.
It seems that long term unemployment in the Eurozone, especially in Southern Europe is here to stay. Even with QE, average Eurozone unemployment is expected to stay at circa 10% twice the level in the US. Of course, unemployment is much worse in Southern Europe, where youth unemployment is 50% plus.
The new team at the European Commission have been busy citing their initiatives for dealing with unemployment but it seems that the researchers at the ECB are much more negative in outlook.
I still think that the Eurozone must relax the Fiscal Constraint and, at the same time, accelerate structural reform, especially in Southern Europe – this needs to give way to a huge fiscal stimulus.