Led by rising unemployment in Portugal, Ireland, Italy, Greece and Spain, Euro Zone unemployment hit a new high of 11.7% in October, as 173,000 more people lost their jobs. This unemployment figure is the highest since record keeping began in 1995.
Why does this matter to those of us who don't live in Europe? Because as more Europeans lose their jobs, the economies of their nations contract and they import less of our goods. That matters because the Euro Zone is the world's biggest market for imported goods, not the U.S. as is the common belief.
But even more important, as their economies contract, it raises the likelihood they will default on their debts, leaving us exposed as our banks, mutual funds and other depositories of our savings have invested money there. You and I will feel it personally.
Even worse, for those of us paying attention, we see and feel the suffering of the men, women and children in these nations and it touches our hearts. And ultimately their suffering will be our suffering for none of us as mankind is independent of our brethren.
The irony is that their suffering is being compounded by the institutions that have loaned money to their nation's governments and are now demanding extreme austerity for bailouts, loans being made at high rates of interest to nations that already can't pay their bills. As a result, the payback of those bailouts is also jeopardized.
Instead of further austerity, those nations need to employ more of their people, need to fully honor their financial commitments to their retirees who are now using their retirement funds to help support their families in these hard times, and for now, they must stop raising taxes, which only extracts money from their economies, to pay their lenders. It serves no-one to cause an unnecessary financial cataclysm.
Instead, let us all help those financially troubled nations and their people get back on their feet.
To read more, please see "Euro-Zone Joblessness Is Pushed to New High," The Wall Street Journal http://online.wsj.com/article/SB10001424127887323751104578150620577134366.html