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Europe's debt crisis affects jobs, manufacturing

A man walks past a discount retailer of general merchandise at single-price point of one euro in Athens, Greece. For many Europeans, the effects of the debt crisis are felt very close to home -- with unemployment soaring and manufacturing suffering.

Kai Ryssdal: Let's talk jobs as a way to get going today. We'll get the April unemployment report Friday morning. It's one of those A-list economic indicators everybody pays pretty close attention to. The good people at ADP, who process payroll checks for many a private company out there, said this morning they're guessing Friday's jobs report from the Department of Labor is going to be fine -- some new jobs but a little soft.

One might use stronger language to describe the labor market in Europe. We learned this morning the eurozone lost almost 170,000 jobs last month. The unemployment rate over there is now 10.9 percent. Manufacturing's bad. There are big and controversial elections this weekend.

Europe, it seems, is much more than a just a debt crisis, as Marketplace's Scott Tong reports.


Scott Tong: Europe can be complicated.

But Chris Williamson of the financial firm Markit in London puts it simply: “really terrible numbers.”

Chris Williamson: It’s a double digit recession, it’s a slump. All sorts of horrible words. It’s a situation we’ve not seen since the 1930s.

Spain just joined seven other eurozone countries in recession. Its unemployment hit 24 percent. For young Spaniards, it’s even worse: 5 in 10 are jobless.

Williamson: It’s changing the fabric of the whole society, when there’s that many people unemployed.

Economists are playing European 'Where’s Waldo,' hunting for signs of life. Governments that otherwise would spend their way out can’t -- they’ve pledged to balance budgets. Banks are holding onto money, instead of lending to people. Even Germany saw manufacturing slump to a near three-year low.

Economist Carsten Brzeski at ING Group in Brussels says no one’s buying stuff -- inside Europe or out.

Carsten Brzeski: The Chinese economy is slowing. U.S. economy is not really picking up. You would need to discover life on Mars if the German export success should continue.

This weekend, Greece and France hold elections. Many voters want to rein back austerity programs, but that could unravel European unity.

Before it gets to that, Paul Christopher at Wells Fargo figures the European Central Bank would swoop in and print money or bail out a free-falling country.

Paul Christopher: As long as the ECB can be the firewall, I think we will avoid a breakup of the euro.

He thinks Europe’s bottoming out. But many, many others think it will get messier before it gets neater.

In Washington, I’m Scott Tong for Marketplace.

About the author

Scott Tong is a correspondent for Marketplace’s sustainability desk, with a focus on energy, environment, resources, climate, supply chain and the global economy.
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Of coures many voters would want to pull back austerity measures, especially the ones that were receiving the handouts.

If someone is drunk and they stop drinking, they get a hangover. That sick feeling is price that must be paid to get sober. You can drink more if to postpone the hangover, but anyone that's actually tried this knows that it just make it worse when it does come. You can't stay drunk forever, either you run out of money or you die of liver failure.

So the fact that in the short run the economies are going through painful adjustments is not suprising. It's necessary and is the road to economic health. At the sam time as they're cutting government spending they need to liberalize their labor markets to get the benefits of the labor that is being liberated in the form of lower labor costs and lower costs of living that go hand in hand with that.

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