In November 113,000 more people lost their jobs, leaving a record number of people unemployed as their numbers continue to mount. In Spain and Greece, those numbers are already about 26 percent of the workforce, compared with 25 percent unemployment in the U.S. at the worst of the Great Depression.
Yet further cuts in public spending loom, as do higher taxes, in an effort to slash the budget deficits Euro nations such as Portugal, Ireland, Italy, Greece and Spain face, and to satisfy their lenders so that they can conduct additional borrowings. The irony is that these nations cannot pay their current debts and so the new borrowings make the situation worse.
In this economic environment, few businesses hire more people and some are shifting jobs elsewhere to avoid the problems. Nor in this economic environment are people buying homes, cars, appliances and other sizable items that would spur on their economies and create jobs.
Until lenders write-off a substantial part of the earlier money they loaned to the weakest of theses nations, the problems are likely to grow worse. Inevitably, lenders will write-off a portion of those debts, and when they do, those nations will start to get back on their financial feet and strive to regain their prosperity as they put their people back to work.
To learn more, please see "Euro-Zone Unemployment Hits New High," The Wall Street Journal http://online.wsj.com/article/SB10001424127887323482504578229080785389130.html and "Ireland Warns of Lingering Woes Amid New Bond Offer," The Wall Street Journal http://online.wsj.com/article/SB10001424127887323482504578229311372648792.html?mod=googlenews_wsj