Fallout: The Financial Crisis

Euro countries face similar job crisis

Stephen Beard Jul 2, 2009
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Fallout: The Financial Crisis

Euro countries face similar job crisis

Stephen Beard Jul 2, 2009
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TEXT OF STORY

Kai Ryssdal: I think what happened with those jobs numbers this morning was mostly disappointment. The May figures we got a month ago weren’t great, about 375,000 jobs lost. And everybody was hoping that was a sign that the labor market was turning around a little bit. Nobody really expects unemployment numbers to move uniformly one way or another. But today’s report that came in way worse than anybody expected has definitely taken the wind out of the economy’s sails. Meanwhile, the European labor market isn’t doing any better. The jobless rate across the 16 countries that use the euro is moving right along with ours: 9.5% — and that could make things worse for us. From the European Desk in London, Marketplace’s Stephen Beard reports.


STEPHEN BEARD: The figures are bad, but it would have been much worse without the emergency measures in force in Germany. Europe’s largest labor market has held unemployment down. Rather than lay off large numbers of staff. German companies have kept them on, working a shorter week, often with government subsidy in the hope of an early upturn.

Analyst Simon Tillford says that can’t continue.

SIMON TILLFORD: The assumption that there will be a relatively robust economic recovery now looks pretty far-fetched. And German companies are going to start laying off workers in large numbers over the next six months.

Europe’s biggest economy is heavily dependent on exports. Andrew Hilton is head of the CSFI think tank in New York. He says Germany needs above all to see recovery in the world’s biggest export market.

ANDREW HILTON: If the U.S. economy bounces back, the German economy will bounce as a result of it. But if the recession is prolonged in the U.S., then again, we will see rising unemployment in Germany particularly focussed in the export sector.

Today’s worse than expected job figures in the U.S. produced more gloom in Europe. Many economists now expect eurozone unemployment to hit 11 percent.

In London, this is Stephen Beard for Marketplace.

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