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Eurozone faces economic DEATH SPIRAL as a third to two-thirds of youth remain unemployed

By Catholic Online (NEWS CONSORTIUM)
May 31st, 2013
Catholic Online (www.catholic.org)

Eurozone unemployment has reached 12.2 percent and in some places almost a third to two-thirds of all youth are unemployed creating concerns that an entire generation will be lost.  France is now witnessing its highest unemployment in history as businesses deal with sharp tax increases.

LOS ANGELES, CA (Catholic Online) - New statistics released from Europe show that unemployment is the highest it's ever been in the Eurozone since 1995. It is also in its longest recession since its creation in 1999.

Southern Europe, including Greece, Italy, Spain, and France are experiencing severe unemployment. France has the second largest economy in Europe, so its financial woes do much to depress the Eurozone.

About forty percent of French youth are jobless.

Even the greatest financial optimists have given up home for a strong recovery. Any recovery in Europe will be both slow and weak.

This has Eurozone officials casting about for options that go beyond interest rate cuts and printing currency.

The heart of the problem are over-generous pension and welfare programs, which the governments cannot afford to sustain. Despite the ongoing recession, these popular programs remain in place, sustaining millions, but at costs the Eurozone cannot afford.

Economists are warning that the Eurozone will need to consider labor and welfare reforms to save their economies. Without such reforms, the system will collapse entirely.

Unfortunately, even under the best-case scenario, where labor unions and the government can agree on aggressive cuts to welfare programs, the benefits will still take time, even years to be fully realized. Still, any move in the right direction could bolster confidence and inspire investments to return to Europe.

Without those reforms, investors and banks are shy about doing business in Europe and many have pulled away, seeking to invest in stronger economies such as the U.S. and China.

As investors pull away from Europe, consumer spending is also down in several countries. In France, consumer spending power declined by 0.2 percent, the first such contraction since 1984.

However, with no work to generate income, and no demand to create jobs, the nations of Europe appear to be entering a financial death-spiral that could ultimately destroy the Eurozone.

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