Unemployment rates of the PIIGS
Click to enlarge

 

 

Since 2007, these respective countries have seen their unemployment rates all skyrocket. Greece and Spain are leading the way, with U/R up more than a 300%.

The PIIG states are a dangerous combination of corruption, low wages, and tax avoidance that makes their political situation volatile. Add high unemployment to a middle class that has been pressured by harsh economic conditions, and you have circumstances right for disruption.

I am not a believer that Cyprus set the template for other European (read PIIG) deposit grabs, but it is becomes less unthinkable if the situation accelerates to the downside.

More on this later . . .

 

 

Source:
Global Financial Data
Ralph M Dillon March 26, 2013
www.globalfinancialdata.com

Category: Employment

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

12 Responses to “PIIGS Unemployment Rates”

  1. wally says:

    The things is, after five years those rates are still going up. I don’t know that there is any good ending to that story.

  2. Terry says:

    “The PIIG states are a dangerous combination of corruption, low wages, and tax avoidance that makes their political situation volatile. Add high unemployment to a middle class that has been pressured by harsh economic conditions, and you have circumstances right for disruption.”

    Actually, this sounds a lot like where we are headed–not today, but maybe by decade’s end. Corruption already exists, real wages are declining, and tax avoidance (including tax & attendant “entitlement” cuts) is getting worse, and unemployment/underemployment/out of workforce is high and nearly stagnant.

    Stay tuned….

  3. RW says:

    “The PIIG states are a dangerous combination of corruption, low wages, and tax avoidance …”

    Spain’s problem was wages were too high due to the construction boom.

    It would probably be more accurate to replace “low wages” with trade imbalances wrt northern Europe that are balanced by capital flows in the other direction. Add lack of currency control and insufficient labor mobility with a big dash of austerity policies and you have the witches brew.

  4. cmellen says:

    I’d agree Cyprus isn’t a template. It is because it has always been about jobs and banks when it comes to bailouts. European banks have very little exposure to Cypriot banks and sovereign debt so there is no justification for using tax payer money to bail them out. Every European bank had exposure to Greek banks and were loaded up on the sovereign debt. I highly doubt they would have gone this route had the European banks been facing big losses over Cyprus. The Eurozone is loaded with Spanish/Italian Sovereign debt and bank debt.

  5. stonedwino says:

    BR: “The PIIG states are a dangerous combination of corruption, low wages, and tax avoidance that makes their political situation volatile. Add high unemployment to a middle class that has been pressured by harsh economic conditions, and you have circumstances right for disruption.”

    KABOOM!

  6. AHodge says:

    all the troubled countried f..ed up. probably portugal the least.
    but they are not in charge of their policies and cant get out
    so EU Cant/ should not ignore them
    at this point a bank cleanup combined with a blast of temporary VAT tax holiday and a rates
    and a euro collapse on purpose may be only decent solution.. a ray dalio solution
    27% unemployment rapidly goes to ??? otherwise. plant vegetable gardens
    and get over those gun control laws–its bad in southern tier europe

  7. wally says:

    “European banks have very little exposure to Cypriot banks and sovereign debt ”

    There is one of the roots of the problem: distinguishing “European” banks from “Cypriot”banks. Cyprus thought it was joining the Euro, that it was one of them. It has been shown, however, that it is not.

  8. Lyle says:

    Of course the final outcome of the Greek Cyprus mess (there is a part of the island it does not cover the part occupied by the unrecognized Turkish government). Is in effect 2 banks failing in everything but name. Given the protection of the insured deposits, the same thing would and did happen in the US with IndyMac and indeed with Penn Square Bank in the 1980s. In those cases depositors above the insured limit got a certificate and got paid later. It appears for some reason they just did not want to fail the 2 banks. However for the depositors at the two banks it walks like a failure and talks like a failure and quacks like a failure so it is really a failure.

  9. rwboomtown says:

    Spain also has ridiculous labor regulations. It is time to pull the band aid off and end the Euro, let Spain and other countries set their own path or non path to growth and prosperity.

  10. Frilton Miedman says:

    Meanwhile, back at the ranch, Paul Ryan & Co. persist.

  11. GriffinB says:

    “The PIIG states are a dangerous combination of corruption, low wages, and tax avoidance that makes their political situation volatile.” That statement is pretty much 100% inaccurate in relation to Ireland, which is taking its bitter economic medicine in full and is showing no signs of serious discontent. It’s difficult to draw one single lesson even from the Mediterranean group – certainly the other commenters aren’t up to it – but Ireland’s just not in the same category. Your sweeping generalisations need more work.

  12. Theravadin says:

    Hmm… “corruption, low wages and tax avoidance”…bit of a generalization for what are in fact quite different situations from country to country. Ireland and Greece are very different countries, with different problems… for that matter, so are Italy and Spain. In each of those pairs,one started out with structural deficits and a disfunctional political culture, the other started out with problem banks and a collapsing real estate sector. While corruption, low wages and tax avoidance are undoubtedly accurate characterizations of Greece and Italy, Ireland is no worse in these categories than the US… There are no more one size fits all problems than there are one size fits all solutions.