job-centre

The EU’s unemployment rate is hovering around 10%. That’s high, but it’s nothing new in itself; many European countries experienced similarly high unemployment rates after the 1960s. However, the headline EU figure is misleading because it masks a great deal of divergence between national economies. Some EU Member States have an unemployment rate below 5%, while others suffer joblessness at above 20%.

We had a comment from George, who argued that one of the fundamental economic principles behind European integration was supposed to have been the gradual convergence between the economic performance of rich and poor countries. However, George argues that this convergence has not happened (or, at least, has not happened fast enough).

During a recent event hosted by our partner think-tank Friends of Europe, we caught up with Jyrki Katainen, EU Commission Vice-President for Jobs, Growth, Investment and Competitiveness, and former Prime Minister of Finland (2011-2014). We asked him how he would react to George’s comment, and if he believed that the EU should focus its employment and growth policies on those countries that most need jobs?

Why do some European countries have higher unemployment than others? Should the EU should focus its employment and growth policies on those countries that most need jobs? Let us know your thoughts and comments in the form below, and we’ll take them to policymakers and experts for their reactions!

IMAGE CREDITS: CC / Flickr – Matt Brown

In partnership with:

 

Fondazione Cariplo


32 comments Post a commentcomment

What do YOU think?

  1. avatar
    Nikos Themelis

    The stupid austerity policies forced upon nations,especially in Southern Europe,combined with the inept disastrous handling of the Euro as a currency,by benefitting only Germany is at fault.
    People complaining for years but in Europe they are asleep at the wheel. Stupid Protestant economic policies,stupid politicians.

  2. avatar
    Ioannis Mitsou

    the main reasons are :1) the monetary (Euro),2)the high taxation for the companies 3)the austerity,4) lack of production as the result of the previous three reasons

  3. avatar
    Carlos Trocado Ferreira

    …Globalization is a highway with two ways and commuting goods and services among each other’s players is resulting on this. In addition, barriers in some countries are not equalized. And because we (Europeans) decided that it is better to create jobs elsewhere, making businesses (import/export) not respecting reciprocal trade rules. A better exchange between countries based more on bilateral agreements are needed in order to accelerate more equitable and profitable ‘global division of labor’…

  4. avatar
    Fran Vončina

    1) rigurous work regulations
    2) too high minimum wage (by too high I mean “a positive real nubmer larger than 0”)
    3) progressive taxation

  5. avatar
    Vinko Rajic

    EU and governments of EU member states should invest in the areas with high unemployment . They should invest so that those people and the EU has benefit of that investment . EU is for the for most donating money to them or building something . EU could do great things like : 1. donate solar system like this in the video to people there , this system cost about 10 000 Euro . They could install it by themselves and local power company could connect it to network . EU could stop energy import , people there could get free clean energy and they could create jobs there . Solar panels are going to work for over 50 Years . To install it like this is simple and cheap , it is like IKEA furniture : https://www.youtube.com/watch?v=-ZOk9kcn__M 2. Find a way to distribute healthy farming product direct to customers without tax, example fruits and vegetables . EU citizens could get access to cheap and high quality food and farmers employment . 3. Experts could find many such a projects but problem is EU is not really doing what they should do . EU care more for Arabs than for EU citizens . If you think Arab problem is the only problem we have than is better to move European Parliament to Cairo .

  6. avatar
    مشیر بارسلونا

    Before corruption done in capitalism by Thatcher, the SME’s used to provide jobs on wide scale. But ever since corporations are taxed lower, the injustice came in. Gradually the money went out of circulation followed by economic crisis in the EU area. Still, the rate of unemployment is higher in the countries where corporations are stronger and SME’s are less.

  7. avatar
    Chris Yuquiz

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    • avatar
      Paul X

      Of course, the answer to all the EU’s problems…..a Quiz……..

      ………go shove your spam where the sun don’t shine “Chris”

  8. avatar
    Silvio Bosco

    The persistance of national sovereign states is the first cause of our societies impoverishment. The European sovereign national states delenda sunt

    • avatar
      EU reform- proactive

      Silvio, do you infer that sovereignty of a nation increases or will increase unemployment? If you are- you are (far) off target!

      Why not interpret the available unemployment statics between 1980 & now- plus overlay them with the many different local events & EEC/EU entrances?

      After a quick look I would conclude that unemployment was very low in the whole of Europe until 1980, but increased thereafter through various reasons. It was usual a consequence of bad political (corrupt) & economic choices by the individual countries but accelerated due to EEC & EU membership and Brussels policies. OK, the EU mean has come down now to ~10%. Individual examples:

      Albania (potential EU candidate country since 2000): a spike in 1992 to 26.5% from 8.9% in 1991, 2014 (14%)- why?

      Greece (EU member): steady until 2008 (~8%) but increasing sharply now 2014 (26.5%)- why?

      Portugal (EU member): before 2009 (7.5%)- after 2009- 2013 (~16%)- why?

      Ireland (EU member): 19% in 1989, than down to 6.4% in 2008- but rising again thereafter- why?

      Generally, stable countries like Austria, Germany show small variances but a slight increase between 1980 (1.6%) & 2014 (5%) – Germany 1980 (3.3%) & 2015 (4.9%)- why?

      What is obvious? Basically, EEC & EU membership was counterproductive (for the majority) in reducing European unemployment! I am not a statistician expert and such damaging suggestions needs verification by neutral think tanks- not politicians.

      From this aspect alone, the EU concept seems a proven failure!

    • avatar
      Tarquin Farquhar

      @Silvio Bosco
      Not all EU states are doing badly, the Scandinavian countries, the Teutonic countries and the UK are all doing well for instance.

      The Club-Med countries however (where do you hail from BTW?) have been performing badly for decades – due to nepotism/racism, cultural dishonesty/corruption and a misplaced belief that the rest of the EU owes them a favour AKA solidarity.

      Some of the Club-Med countries should never have been allowed in the EU and indeed some should be suspended from the EU until their levels of corruption/racism/soliDharity are improved.

  9. avatar
    Stefania Portici

    l’alto livello di disoccupazione è voluta a tavolino per distruggere il modello sociale europeo ( mi riferisco ai diritti sociali dei lavoratori ) a difesa del capitalismo delle Corporation , delle multinazionali e comunque le cause della DISUGUALIANZA di disoccupazione tra Stati , condivido il primo commento , quello di Ioannis e aggiungo che se la Germania avesse ripettato i trattati (import export in pareggio ) poteva essere meno marcata la differenza ma non cambia la sostanza . Il commento di Ioannis è corretto

    • avatar
      EU reform- proactive

      Stefania sorry, but muddle-headed opinions which lack rationality and ignore facts may point to emotional distress, ignorance or endless excuses- or…….? Trade today is a global game & different from running a corner shop at home!

      Ioannis Mitsou “blames” the high taxation for companies and adds the “lack of production” as its result- to high unemployment- which you agree with! Wow!

      How can that (rationally) be possible? Please explain why the US with a still 35% corporate tax rate having only ~5% unemployed must therefore (according to you) be less competitive than Bulgaria, Greece or Italy- having a much lower corporate tax rate but a much higher unemployment rate. Why? Available stats:

      USA: Corporate Tax (CT) 35%, Vat 0%
      China: CT 25%, Vat 17%
      Greece: CT 26%, Vat 23%
      Italy: CT 27.5%, Vat 22%
      Germany: CT: 15.8%, Vat 19%
      UK: CT 20%, Vat 20%
      Sweden: CT 22%, Vat 25%
      Bulgaria: CT 10%, Vat 20%

      * “The United States has the third highest general top marginal corporate income tax rate in the world at 39.1 percent, exceeded only by Chad and the United Arab Emirates.

      * The worldwide average top corporate income tax rate is 22.6 percent (30.6 percent weighted by GDP).

      * By region, Europe has the LOWEST average corporate tax rate at 18.6 percent (26.3 percent weighted by GDP); Africa has the highest average tax rate at 29.1 percent.

      * Larger, more industrialized countries tend to have higher corporate income tax rates than developing countries.

      * The worldwide (simple) average top corporate tax rate has declined over the past decade from 29.5 percent to 22.6 percent.

      * The corporate income tax rate is ONE OF MANY ASPECTS of what makes a country’s tax code and economy attractive for investment. However, as the rest of the world’s economies mature and their tax rates on corporate income continue to decline, the US risks losing its competitive edge due to its exceptionally high corporate income tax rate.”

  10. avatar
    Lilia Penkova

    BECAUSE OF GERMANY ! That state has low level of unemployment because the levels of unemployment in other EU states are high! The logic here is simple – in a common market like the EU, employment at one place means unemployment at another! ;)

    • avatar
      Tarquin Farquhar

      @Ivan Burrows
      Thanks, great but FRIGHTENING link!

    • avatar
      Paul X

      A truthful quote from that link ….

      “These very diverse nations with long histories of shifting alliances and wars don’t really trust each other – they never did. And they’d never fully submit to a fiscal and political union”

      …..that’s the benefit of being an American, he can say things none of our “leaders” will ever admit

  11. avatar
    Tim Finnerty

    In some markets it is too expensive to hire employees; e.g. Belgium. These countries boast high productivity rates, but that just reflects that fact that only the higher paid, most productive workers get jobs. There are fewer jobs for less productive workers, who then fall in the social safety net. You can see it in the understaffed low-skilled businesses compared to other markets.

  12. avatar
    Andrej Němec

    The Countries where unemployment is higher are simply the Countries where the people are lazier. Make an experiment: pretend to be a just-landed foreigner and write an email in English asking for information on the registration process to the local administration of Berlin, Vienna, Helsinki, Brussels, Copenhagen, Stockholm, Luxembourg City. Repeat then the experiment with local administrations of Lisbon, Madrid, Rome, Athens. What do you expect as results? Who’s more likely to answer first and to give you accurate information in English on how to settle down and register (necessary documents, procedures, etc.) Take note of the replying time (if you get one at all) and quality of the answers. Then try to statistically correlate the results with the GDP growth and the rate of unemployment of the respective Countries. You might be surprised (or not too much probably? ) about the outcome…

    • avatar
      Tarquin Farquhar

      @Andrej Němec
      I think the word lazy does not accurately reflect the ‘issues’ – please add:

      corruption,
      nepotism/racism,
      cultural arrogance,
      poor legal systems,
      poor policing and
      poor judiciary

      to the mix

    • avatar
      Eurocop

      strongly agree with Tarquin. Nowhere people are lazy, thats crackpot saying. they all would like to earn money, and be rich in their dreams. But speaking of minima, the issue are in differences in state apparatus, from corruption to poor political and judiciary issues. The fact that such differences exist, means also Euro zone failed in equalizing standards.

  13. avatar
    George1

    Dear Debating Europe team,

    When we ask a question which has sustained roots in the reality, we expect a real answer. Thus, asking the bureaucrats our questions and receiving a random clicheic answer like: creativity and skills…bla bla bla, is not going to generate a fruitful debate, and we, people, are going to get really mad (if not we are already).
    I look forward for more documented answers and more enthusiastic attitudes. These guys are payed to work in the benefit of the european citizen!

    Thanks

    • avatar
      Tarquin Farquhar

      @George1
      FYI DE is part-funded by the EU, just like RACIST* Euronews!

      *Euronews is RACIST because it’s mandate was to counter the Anglo/Saxon perspective of the world i.e. an EU-funded body CREATED to decry/insult/lie about the Anglosphere!

  14. avatar
    Kevin

    The euro has certainly been a factor with its one size fits all interest rate. Greece for example desperately needs to devalue its currency to kick start its economy but cannot because it doesn’t have its own currency to do so .
    Unemployment of young people is a major worry , this has been made worse by the free movement of labour from Eastern Europe . Why would companies train a young person when they can get a skilled worker for minimum wages . Its a mess ,an EU created mess and the reason why some countries have high unemployment is due to EU policies .

  15. avatar
    ned

    Socialism
    regulation
    high taxes

  16. avatar
    blugalf

    Well, you could quote circumstances beyond control, “vis major”, fate and the like. That though has the very inconvenient disadvantage of not being able to simply point at someone nearby and blame them for everything.

    Or you could try easier targets, like the EU, the Euro and the Germans, but that would raise very inconvenient questions such as: why were the Germans actually quite successful even before the Euro; why are some EU and Euro countries doing just fine, and have been doing so for quite some time, while others aren’t and haven’t ever been – even given very similar prerequisites? How did Slovenia in 20 years time manage develop from a wrecked post-soviet command-economy into one of the most successful EU and Eurozone countries, while others, with more of a head start and of similar outlook, simply stalled?

    Or if you’d like to extrapolate a little further, why is North Korea an abominable shìthole in every conceivable respect, while South Korea -the same populace, demographics, geography, climate, language, history, culture- is one of the most highly developed nations on earth? Why is Singapore, hardly more than a miserable stretch of marshland with no natural merits, looked at objectively, such a buzzing hub of human achievement, while other, geographically more fortunate regions on this earth linger in perpetual misery?

    It seems to me it’s hardly ever the climate, lack of natural resources, or what they call their currency; it’s not the evil dominant (read: more successful) neighbours; it’s hardly ever some unavoidable misfortune, actually; not the UN, not the EU, not the Americans.

  17. avatar
    Eurocop

    Whether EU should focus on growth in countries need it most: YES. If its not already too late. But this will not happen by giving just more money to such states.
    Simplifying procedures, as well as sending monitoring and acting units to governments, that they work with such governments for efficient implementation is urgent. Governments having high unemployment alone cannot do it as they are not efficient. Otherwise till now all countries would have low unemployment. For example copy-pasting good practices from those successful ones, but also inventing new practices that could accelerate employability should be enforced. For example, just idea, if you have engineers or scientists with MS or PhD unemployed, allow them or fund them for training in second discpiline or allow them to develop marketable output (without borders and much rules). Maybe to fund a specialization/employment program with industries and partner universities, half time working half time specializing on their interests with university. Or on building marketable solutions. Similarly, if person has no education, allow these to get a degree in second field other than their education. This will make people elastic to market. So something in that direction… I think job market practices is far from ideal, it should be reverse logic where individuals create values in companies or new companies, rather than applying to job ads without complete match. Not to mention that in many states there is no need for highly educated people – but that might be other topic or issue due to lack of real investors and company creating atmosphere, as perhaps lack of high tech companies, high taxes, low investment in R&D etc.

  18. avatar
    Eurocop

    Long time ago there was initiative about single company format and equal taxation, legal things for SMEs, startups… where is that gone? Every state has its own rules, unknown legal frameworks, not cross-compatible, cant you just create US like Inc. around in EU all around, that one can open and close easy online. Same for nonprofits? Also look at the taxation for SMEs or new companies? Some governemts are giving low tax to big industries who open new jobs, but what tax rate have founders? I go and work for big company rather and rather have free time for myself… or find lazy job, this way I also have time for myself. No reward in EU for those innovators or entrepreneurs, just high uncertainty, waiting times, and stress

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