UK - Eurozone Crisis Live

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Eurozone unemployment hits new high

More than one in four people out of work in Greece and Spain as jobless rate rises to 11.6%, according to Eurostat data

Unemployment in the eurozone has risen to a new record, with more than one in four out of work in Spain and Greece.

There are now 18.49 million people without jobs in the 17 countries sharing the euro, said the European statistics office Eurostat on Wednesday with an extra 146,000 joining the ranks of the unemployed last month.

Youth unemployment – joblessness among under-25s – rose to 23.3%, up from 21% during the same month a year ago.

The prospect of high and rising unemployment, especially among younger workers, is expected to persuade the European Central Bank to cut interest rates in the new year from the current record low of 0.75% to support the flagging economy, which probably slumped back to recession in the third quarter, analysts said.

But in contrast to the hope of stimulus from the ECB, Brussels and most eurozone governments have put cuts in spending ahead of schemes to create jobs, despite predictions that the situation will worsen over the coming months.

Portugal's right of centre administration on Wednesday pushed through its third attempt at a budget for 2013, which is expected to lead to a third year of contraction and rising unemployment. Likewise Greece's coalition government published €13.5bn of spending cuts and tax rises that will result in a sixth year of falling GDP and and increase in the jobless rate.

Eurostat said the jobless rate across the eurozone increased to 11.6% in September, the highest on record, from a revised 11.5% in August.

The lowest unemployment rates were recorded in Austria (4.4%), Luxembourg (5.2%), Germany and the Netherlands (both 5.4%), which are near full employment. Spain (25.8%) and Greece (25.1% in July) had the highest unemployment in the eurozone, while France looks much like Italy (both at 10.8%), with a steady rise in joblessness. August data for Greece will be published next week, although the true picture is probably worse than the official figures show as a growing number of Greek workers remain nominally employed but have not been paid for some time.

Howard Archer, chief European economist at IHS Global Insight, said the jobless data was "dismal", adding: "Eurozone labour markets remain under serious pressure from ongoing weakened economic activity and low business confidence."

Youth unemployment also hit a new high in Spain with 54.2% of under-25-year-olds out of work, up from 53.8%.

Across the whole 27 nation European Union, 25.751 million men and women were without jobs last month – an increase of 169,000 from August – while the unemployment rate stayed at 10.6%.

By comparison, the unemployment rate was 7.9% in the UK, 7.8% in the US and 4.2% in Japan in September.

There was some good news for the eurozone though – inflation eased to 2.5% in October, from 2.6%. Energy prices continued to rise, by 7.8%, but by less than the month before, when they climbed by 9.1% year-on-year. Food became dearer, however, with prices up 3.2% compared with 2.9% in September

Andrea Broughton, an economist at the Institute for Employment Studies said: "Given the ongoing financial difficulties of the European Union and the likelihood of continuing job losses in the public sector as austerity measures begin to bite, overall unemployment levels and youth unemployment in particular are likely to carry on rising for the foreseeable future."

She said a north-south split, which has dramatically opened up since the banking crash, would get worse.

"The trend is not upwards in all countries – unemployment levels actually decreased in seven member states on a year-on-year basis, including in Lithuania and Latvia, where it may be that the worst effects of the crisis are over. In Germany, although the economy is slowing there are as yet no adverse effects on unemployment, which has fallen on a year-on-year basis."

In some countries the unemployment figures are depressed by a rise in emigration. Ireland, Greece, Italy, Portugal and Spain have seen a strong rise in the number of people, mainly young, seeking work abroad.

Roughly 370,000 people emigrated from Spain in 2011, 10 times more than before the banking crisis hit the country in 2008.

Although about 86% of them were naturalised immigrants born abroad, there is also a growing number of native Spaniards saying "ya basta" ("enough is enough"). More than 50,000 left last year, up 80% since before the crisis hit.

Eurozone unemployment hits new high | Business | guardian.co.uk

 

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Eurozone Composite PMI October 2012:
Eurozone Economy Endures Worst Month Since June 2009
11/06/2012

* Euro zone composite PMI sinks to 45.7 in Oct

* Headline index at lowest since June 2009

* Services PMI also falls slightly in Oct

By Andy Bruce

LONDON, Nov 6 (Reuters) - The euro zone economy's decline steepened going into the fourth quarter, as companies across the region endured their toughest month in October since June 2009, business surveys showed on Tuesday.

Markit's Eurozone Composite PMI fell in October to 45.7 from 46.1 in September, down slightly from a preliminary reading of 45.8 two weeks ago and marking its ninth consecutive month below the 50 mark dividing growth from contraction.

The weakness was spread across the euro zone's major economies, with business activity in the largest market, Germany, also shrivelling at a quicker pace last month.

Survey compiler Markit said the latest PMI was consistent with the euro zone economy shrinking at a quarterly rate of around 0.5 percent.

If the PMIs fail to improve for November and December, the euro zone economy could easily face a hefty contraction in the fourth quarter rather than the stagnation projected by a median of economists two weeks ago.

The survey will do little to alter the view of a majority of economists that the European Central Bank will trim interest rates to a new record low of 0.5 percent, although probably early next year rather than this Thursday.

"Sentiment is still being hit hard as companies worry about the dual impact of weak domestic demand and a slowing global economy," said Rob Dobson, senior economist at Markit.

"Signs that the contraction in Germany gathered pace are particularly disappointing, given the important role a strong performing Germany could play in stimulating growth elsewhere in the currency zone."

The PMI pointed to little chance of a turnaround coming soon. Surveys from Asia and the United States released on Monday suggested the euro zone will remain the global economy's principal laggard going into 2013.

The composite PMI's new business index was revised up to 44.7 from 44.3, a hefty rise on September's 43.8, but still well below the growth threshold of 50.

The October services PMI, which covers companies as diverse as banks and restaurants, was revised down to 46.0 from the 46.2 preliminary reading, compared with September's 46.1.

That means the services PMI now stands at its lowest level since July 2009.

The survey's employment index rose in October to 47.4 from 45.9, although staying well below the 50 mark for a 10th month, meaning firms are still cutting jobs.

"Ireland was the only real brighter spot in October, with growth improving as it continues to make up lost ground," said Dobson, after its services PMI hit 56.1 in October, a sharp jump from 53.9 the previous month. (Editing by Hugh Lawson)

Eurozone Composite PMI October 2012: Eurozone Economy Endures Worst Month Since June 2009

 

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Euro zone slips into second recession since 2009
November 15, 2012

* Euro zone GDP falls 0.1 pct in third quarter

* France, Germany rise 0.2 but Netherlands, Spain, Italy fall

* Belgium stagnates, Austria also contracts

BRUSSELS, Nov 15 (Reuters) - The euro zone fell into a recession in July-September, the second since the global financial crisis in 2009, as French resilience could not make up for a slump across Europe and the three-year debt crisis slowed Germany to a crawl.

Economic output in the 17-country euro zone fell 0.1 percent in the third quarter, the EU's statistics office Eurostat said on Thursday, following a 0.2-percent drop in the second quarter.

Those two quarters of contraction put the euro zone's 9.4 trillion euro ($12 trillion) economy officially in recession, although Italy and Spain have been contracting for a year already and Greece is suffering an outright depression.

Germany and France, the euro zone's biggest economies, could not save the bloc from a double-dip recession even though both countries managed 0.2 percent growth in the quarter. Large, countries like Italy, Spain and the Netherlands all contracted and Belgium, a big exporter, stagnated.

Millions of people across Europe protested against government spending cuts that EU policymakers say are crucial to ending the debt crisis but which others blame for the economic contraction.

"We are now getting into a double dip recession which is entirely self-made," said Paul De Grauwe, an economist with the London School of Economics. "It is a result of excessive austerity in southern countries and unwillingness in the north to do anything else," he said.

Not everyone shares that view and the European Commission says labour costs are falling and exports are rising for Greece, Portugal, Spain and Ireland, arguing that austerity is a necessary evil to bring down unsustainable budget deficits.

The European Commission sees a 0.4 percent contraction for the euro zone in all of 2012.

Hopes for a recovery next year are also fading, with the European Commission saying the economy will grow just 0.1 percent in 2013.

A rebound in the euro zone could be vital for the rest of the world as the United States and China struggle with the impact of the crisis on their companies' ability to grow and prosper.

In one positive sign, Eurostat said separately that the euro zone's annual inflation fell to 2.5 percent in October from 2.6 percent in September, suggesting an end to a run of stubborn inflation that has contributed to the difficult environment.

But after months of resilience, Germany, Europe's largest economy, is seeing its companies unnerved by the crisis and demand for its goods in the euro zone and abroad is drying up.

While German gross domestic product expanded by 0.5 percent in the first quarter, it slowed to 0.3 percent in the second and weakened again in the third quarter.

Economists expect a worse performance in the fourth quarter.

Euro zone slips into second recession since 2009 | Reuters

 

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Britain is losing the economic Olympics

As London prepares for another display of British pageantry and good humor to match the unlikely triumph of last month's rain-sodden Royal Jubilee, a less impressive aspect of Britain's stoical "stiff upper lip" may detract from the national pride associated with hosting the Olympics. In the global race out of recession, Britain has just been revealed as a prime contender for the wooden spoon.

Not only was the shocking drop of 0.7 percent in Britain's second-quarter GDP reported on Wednesday much bigger than investors and independent economists had expected but it almost matched the 0.8 percent fall in Italy's GDP the previous quarter. And that Italian drop holds the record for the biggest quarterly contraction suffered by any G7 country since the immediate aftermath of the Lehman crisis. Much more important than such statistical trivia is the fact that Britain's economic output is still 4.5 percent below the peak level it reached in the first quarter of 2008, more than four years ago. The U.S. and German economies, by contrast, are now significantly bigger than they were before the crisis and, in this sense at least, have left the recession behind them. And even the euro zone as a whole, despite the severity of its financial crisis, has done much better than Britain, with GDP just 2 percent below its peak in 2008.

National economic performance is not, of course, a competitive Olympic sport, and there is more to economic success than GDP growth. Still, there is a good reason for connecting the Olympics with economics: International competitions and comparisons can teach useful lessons and create incentives to improve economic management.

The most instructive international comparison at present is between the British and American efforts to clamber out of recession and financial crisis. This race is about as close as economics can get to a controlled experiment of the kind favored by natural scientists, in which sharply different policies are applied to two countries with broadly similar structures and initial conditions, facing similar economic problems.

In 2008, the U.S. and Britain were two advanced economies with large financial sectors, dangerous housing bubbles, heavy consumer debt and similar government deficits and debt levels relative to GDP. Both suffered extremely severe banking crises that forced their governments to take on huge additional liabilities by guaranteeing their biggest banks. For two years after the Lehman crisis in September 2008, the two economies followed broadly similar policies: slashing interest rates to zero, allowing large expansions of their budget deficits and financing the resulting debt with newly printed money. The two economies moved closely in tandem, as economic theory would have predicted: both on the way down until mid-2009 and then on the way up until mid-2010.

But then, in the summer of 2010, the newly elected British government set a radically different course for one very specific and controversial aspect of economic policy – government borrowing. Instead of simply tolerating the big budget deficits that had resulted from weak economic growth, as both the U.S. and British Treasuries had done until 2010, David Cameron decided his top priority would be to reduce government borrowing. He planned to do this by slashing public spending and imposing substantially higher tax rates. The U.S. government, meanwhile, continued with a fiscal policy of benign neglect. Despite all the sound and fury in Washington about deficits and debt limits, U.S. tax rates and public spending plans remained broadly unchanged through 2011 and 2012, with a small cut in payroll taxes largely offsetting the fiscal impact of cuts in local government spending and employment. In all other respects conditions in the two economies remained unchanged. Both central banks continued to print money and to keep interest rates near zero. The dollar and the pound moved very little against one another, and exports grew moderately in both countries, despite the crisis in the euro zone. In short, this really was a controlled experiment on the impact of different fiscal policies.

Curiously enough, the two economies began to diverge from the moment this controlled experiment started, with the British economy contracting in the third quarter of 2010, while growth accelerated in the U.S. In the period since then, the U.S. economy has expanded by 2.7 percent, while Britain has contracted by 0.8 percent. The latest results of this experiment will be revealed on Friday, when the U.S. GDP figures are published and can be compared with the 0.8 percent fall in British GDP just announced.

It may be said, of course, that the British policy of fiscal consolidation was still justified, even if the U.S. enjoys much stronger growth, as it almost surely will. After all, controlling public debt and deficits is an important national objective that counts for more than simply juicing up short-term growth.

But this is where we get to the really significant and surprising feature of the race out of recession. Britain's heroic spending cuts and tax increases imposed by the Cameron government may contrast starkly with lassitude and cowardice displayed by politicians in Washington. But this dramatic political contrast has made absolutely no difference on the debt and borrowing outcomes the two countries have actually achieved, because the British austerity has simply prolonged recession, while U.S. fiscal laxity has allowed the economy to grow. According to the latest IMF figures, published two weeks ago, the U.S. budget deficit has been reduced from 10.5 percent of GDP in 2010 to 8.2 percent in 2012. This reduction is a slightly bigger reduction in the deficit than Britain has managed to achieve in the same period – from 9.8 percent to 8.1 percent.

In short, any country determined to control public borrowing should forget about fiscal austerity and instead do everything to grow as fast as it can – a fitting economic message from Olympic Britain.

Britain is losing the economic Olympics | Anatole Kaletsky

 

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UK Oct Services PMI Lowest Since Dec 2010
November 5, 2012

-UK Oct CIPS Services PMI 50.6 Versus 52.2 In Sep - Markit/Reuters -UK Oct CIPS Composite PMI 49.7 Versus 51.0 In Sep

LONDON (MNI) - UK services sector growth slowed markedly in October, with the sector barely expanding at the start of the fourth quarter.

The headline October CIPS services PMI plunged to 50.6 from 52.2 in September, the lowest outturn since December 2010 and only just above the 50 breakeven level. Following a 47.5 outturn for manufacturing in October, these data raise the risk of the UK economy returning to negative growth in Q4 after the 1% surge in quarterly growth seen in Q3.

The composite PMI for October dropped below the 50 level, coming in at 49.7, down from 51.0 in September.

Business expectations fell to 65.3 from 67.0 in September, the lowest outturn since June.

One bright spot for the UK economy in the post credit-crunch world has been the resilience of employment, but this survey showed staffing levels in the service sector were cut for the second month running.

Input costs rose but there was a smaller rise in output prices, entailing a squeeze on margins.

More encouragingly, new orders continued to expand, although growth was softer than in October.

Economists drove home the message that after the robust Q3 growth, these data suggest the economy has stalled again.

"With activity rising at the weakest pace in close to two years, the broadly stagnant trend seen in official data over the year to date looks to have continued at the start of the fourth quarter," Andrew Harker, Economist at survey compilers Markit, said.

The CIPS figures suggest "a return to contraction is on the cards for the UK in Q4," Rob Wood, Chief UK Economist at Berenberg, said.

Many analysts have said the November Bank of England Monetary Policy Committee meeting would be a close call, although most expected no change in policy.

"The MPC pays a lot of attention to this survey and this Thursday's meeting now looks an even closer call than before," Vicky Redwood, Chief UK Economist at Capital Economics, said.

While the MPC may not change policy in November, she said the committee was unlikely to pause for long.

https://mninews.marketnews.com/content/update-uk-oct-services-pmi-lowest-dec-2010

UK manufacturing PMI falls to lowest level in more than 3 years

LONDON, Aug 1 (Reuters) - Britain's manufacturing sector shrank at its fastest rate in more than three years in July, a survey of purchasing managers showed on Wednesday, dealing a blow to hopes that the country was about to come out of recession.

The grim news supports the view that the Bank of England will add further stimulus once its current 50 billion pound ($78.3 billion) plan to buy government bonds with newly created cash ends in November. It even triggered speculation the central bank could step up its programme when its August policy meeting ends on Thursday.

Britain fell into its second recession in four years around the turn of the year, and the economy contracted by a further 0.7 percent from April to June due to government spending cuts, euro zone turmoil, bad weather and an extra public holiday.

Many economists have been betting that some of the output lost will be recovered in the third quarter, but the Markit/CIPS Manufacturing Purchasing Managers' Index's (PMI) drop to 45.4 from 48.4 in June raises the risk of another contraction.

It was the lowest reading since May 2009, further off the 50 mark that separates contraction from growth, and well below even the most pessimistic economist's forecast in a Reuters poll.

The weak survey sent sterling to a two-week low against the euro and supported gilts which outperformed their German equivalent.

"Pretty terrible, surprisingly bad," Tom Vosa, an economist at National Australia Bank, said about the PMI. "Ultimately, this puts more pressure on the (Bank of England) to cut Bank Rate, and certainly the government now has to hope that its Funding for Lending Scheme really comes good," he said.

"But of course, if you are a lender in the UK and you are looking at this economy, why would you necessarily want to extend credit?," he said.

The government's scheme to get credit flowing through the economy officially started on Wednesday.

Business lobby groups applauded the plans to boost lending, but economists warned against putting hopes too high.

The scheme was an important step to lower banks' funding costs and ease lending conditions, but was unlikely to be a "game changer", Goldman Sachs analyst Kevin Daly said in a note.

Tight credit together with a lack of consumer confidence has been a major drag on the economy, hitting the housing market particularly hard.

House prices in Britain fell at their fastest annual pace in nearly three years in July, mortgage lender Nationwide said.

However, some retailers are bucking the gloom: Britain's second-biggest clothing retailer Next's sales rose 4.5 percent in the six months to July 28, and its chief executive said he did not expect the economy to take a turn for the worse.

CRISIS

Britain's economy has not yet recovered the output lost during the 2008/2009 slump, and the renewed recession comes at a time when many Britons are seeing their finances squeezed by rising prices and higher taxes, eating away measly wage rises.

"The domestic market shows no real signs of renewed life, while hopes of exports charting the course to calmer currents were hit by our main trading partner, the euro zone, still being embroiled in its long-running political and debt crises," said Markit economist Rob Dobson.

The PMI survey showed that export orders fell at the sharpest rate since the height of the financial crisis in February 2009, and the output index slumped to 43.3 from 51.9, also the lowest level in more than three years.

"It looks like the sector remains a major drag on the overall economy," Dobson said.

The slump in manufacturing is also keeping the pressure on policymakers to get the economy going again.

The government sees no room for a major spending boost, having pledged to erase a huge budget deficit within the next five years, thus leaving the onus on the central bank.

Most economists expect an extension of the BoE's purchases of government bonds beyond the current goal of 375 billion pounds in November, but some see a chance of earlier action.

"While we accept it is a close call, we believe that the extent of the revisions to the Bank's projections mean that the Bank will not wait until November to expand QE further - rather it will act at this meeting," said Alan Clarke from Scotiabank.

The BoE looks likely to slash its inflation and growth forecasts in its August inflation report, which governor Mervyn King will present next week.

The PMI survey showed that companies' cost pressures eased as prices for chemicals, oil, metal, paper and plastics fell. But firms still hiked their selling prices, Markit said.

Consumer price inflation has fallen sharply in recent months and the British Retail Consortium said on Wednesday shop prices rose at the slowest pace in more than 2-1/2 years in July.

UPDATE 2-UK factory slump shows no quick end to recession | Reuters

 

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Anger as UK slashes army numbers

THE British army will lose 17 major units in a sweeping restructuring to handle the loss of 20,000 soldiers under the government's austerity drive.

The UK's army is shrinking from 102,000 troops to 82,000 by the end of the decade - part of efforts to meet steep cuts to public spending ordered by Prime Minister David Cameron.

Cookies must be enabled. | The Australian

 

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Nationwide Spanish protests turn violent

Nationwide Spanish protests turn violent (PHOTOS, VIDEO) — RT

Spanish police have clashed with protesters who marched against the latest batch of austerity measures. Over a million public employees, trade union members and fed-up citizens have taken to the streets in over 80 Spanish cities.

*Violence erupted in Madrid around midnight. Police used rubber bullets and tear gas to disperse the crowd as it tried to reach the congress building. In some more urban areas, activists set garbage containers on fire and tried to block police vehicle access. No injuries or arrests have been reported.

In Barcelona, similar scenes were reported. About a dozen protesters were arrested there, outside the local parliament building.

*Demonstrators carried flags and banners decorated with scissors, symbolizing the country's harsh spending cuts. The streets of Madrid were paralyzed by the boundless crowds of people.

The protests were organized by unions, who have been outraged by the government's new measures – which include an elimination of Christmas bonuses for civil servants.

Earlier Thursday, Spanish Parliament approved a new package of spending cuts and tax hikes aiming to save $80 billion in a bid to take a bite out of the budget deficit. Since the measure was announced last week, Spain has witnessed a series of daily demonstrations, some of which have erupted into violence.

Europe's fourth-largest economy also has the EU's highest unemployment rate. About a quarter of working-age Spaniards are unable to find work.

Meanwhile, Germany's lower house approved a $122 billion rescue package for Spanish banks in a bid to help the country cope with "excessive" market fears and prevent the eurozone's debt crisis from spreading further.

Spain, Madrid: Riot policemen remain on a street of Madrid during a protest against the Spanish government's latest austerity measures, on July 19, 2012.

Spain, Madrid : people demonstrate against the Spanish government's latest austerity measures in the center of Madrid on July 19, 2012

Protesters march during a demonstration against government austerity measures, in central Valencia

Demonstrators fill Madrid's Puerta del Sol square during a protest against government austerity measures. (REUTERS / Sergio Perez)


Firefighters pose naked in front of a banner during a demonstration against government cuts inside their fire station in Mieres (REUTERS / Eloy Alonso

Civil servants shout slogans during a protest against government austerity measures in Madrid (REUTERS / Sergio Perez

Firemen participate in a protest against government austerity measures in Barcelona.(REUTERS / Albert Gea)

Spain, Madrid : Spanish actors Javier Bardem his brother Carlos Bardem and their mother Pilar Bardem demonstrate against the Spanish government's latest austerity measures in Madrid on July 19, 2012.

Nationwide Spanish protests turn violent (PHOTOS, VIDEO) — RT

 

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Merkel said Tuesday that full debt sharing would not occur "as long as I live."

On the eve of a European summit, German Chancellor Angela Merkel touts tighter budgetary controls and says debt sharing will not occur 'as long as I live.'

BERLIN — As European leaders gather in Brussels on Thursday for a two-day summit aimed at resolving the Eurozone's debt crisis, German Chancellor Angela Merkel's response to the most aggressive proposal pushed by her neighbors is, in essence: Over my dead body.

With borrowing costs for Spain and Italy approaching unsustainable levels, European Union leaders have stepped up their pressure on Germany to accept solutions it has long resisted. But Merkel, whose country has Europe's largest economy and probably will foot the highest share of the bill for rescuing its struggling neighbors, has dug in her heels.

In response to the widespread call for euro bonds, which would allow European countries to issue debt jointly and could ease the cost of borrowing for highly indebted southern European countries, Merkel said Tuesday that full debt sharing would not occur "as long as I live."

A road map issued Tuesday by four senior European officials — European Council President Herman Van Rompuy, European Commission President Jose Manuel Barroso, European Central Bank President Mario Draghi andJean-Claude Juncker, head of the group of Eurozone finance ministers — laid out a range of proposals for discussion at the summit, including possible moves toward debt sharing.

However, Merkel said Wednesday that the focus should be on tighter budgetary controls across the Eurozone, the 17 nations that share the euro currency.

"I'm afraid that at the summit there will be much too much talk about joint liability and far too little about improved oversight and structural measures," Merkel said in an address to the Bundestag, the lower house ofGermany'sParliament. "Oversight and liability must go hand in hand. There can only be joint liability when adequate oversight is ensured."

Merkel's deputy foreign minister, Michael Georg Link, likewise criticized the road map as a "wish list" that wouldn't win German backing.

Germany is wary of proposals that would allow debt-ridden countries to relieve their burdens without first implementing painful cost-cutting measures, particularly when German taxpayers' money is on the line. But with fear growing that Italy and Spain — the Eurozone's third- and fourth-largest economies, respectively — are fast reaching the point where they cannot sustain their debt, critics say the Merkel administration is not acting with due haste.

"In Germany, the feeling of urgency is still not strong enough," said Sebastian Dullien, a Berlin-based economist and senior fellow at the European Council on Foreign Relations.

In Madrid, Prime Minister Mariano Rajoy told lawmakers that the cost of borrowing since Spain recently requested a bailout for its banks has climbed so steeply that the nation might not be able to finance itself much longer through debt.

"We can't keep funding ourselves for too long at the prices we're currently paying," Rajoy said. The summit may yield agreement on a number of small measures to ease the continent's debt crisis, such as removing the so-called preferred creditor status of the Eurozone's permanent bailout fund in order to reassure other lenders to struggling countries that they would get their money back. Germany appears open to the idea, at least for Spain.

But few expect progress at the summit on more decisive measures to reassure nervous investors, such as debt sharing. Dullien considers it unlikely that Germany will consent to the major controversial proposals of the road map.

Germany leader opposes full debt sharing in Eurozone crisis - Los Angeles Times

 

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in this video as below about the pigs, (PIIGGS), the 'dirty' economies who earn less and spend more. in one picture, all these pigs of EU are going down in water but Germany isn't willing to give its hands to them, see the video carefully......

 

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Gexit Is Better Than Grexit

There would be no domino effect if Germany leaves. Remaining in the euro entails Germany's paying indefinitely for debts made by others.

Any reasonable person would assume it highly unlikely that Europe's leaders would have adopted the euro as their common currency if they had known 10 years ago what a mess they would be in today. The euro project, however, was not a project of reason but of political correctness. Ten years ago many economists warned that adopting a common currency for countries with such divergent economies as divergent as Germany and Spain (not to mention Finland and Greece) could not work. In spite of this, Europe's unelected political class pushed through the euro.

Today it is clear as well that the euro in its present form cannot survive without bankrupting all the economies of Europe. Yet the Europe Union's political class still persists in its vain and costly attempts to save the common European currency -- simply because giving up on the euro would mean admitting they were wrong from the start. What's more, the EU ideology that Europe is to develop into a genuine federal state does not allow its leaders to admit that Europe is a cluster of distinctly different nation states with different interests, cultures, languages and traditions.

The people of Europe were cheated from the start. They outspokenly did not want their nations to be submerged into a "United States of Europe." That is why, when the euro was instituted, the political class promised that no country would ever have to foot the bill of another country. However, in 2009, when Greece needed its first bailout to avoid bankruptcy, Europe's leaders at once violated the EU rules which forbid the member states to bail out other members. If the EU had played by its own book – as it should have done – Greece would have gone bankrupt and left the euro two years ago.

Sticking to the rules, however, was out of the question: neither France nor Germany was prepared to drop Greece. France sees itself as the leader and patron of the bloc of southern EU countries; Germany fears that if it insisted on pushing a country out of the eurozone it would be accused of immoral selfishness and all the goodwill it had acquired since the Second World War would be lost. As the two major EU countries were prepared to bail out Greece, the smaller member states all went along, assuming that only one bailout (and just for Greece) would be needed.

Meanwhile, the EU has been forced to bail out Ireland and Portugal, as well, and Greece for a second time, while Greece is now clamoring for a third bailout and Spain also needs to be bailed out.

The EU's fatal decision to bail out Greece in early 2010 indicates that in an ideologically driven political environment such as the EU, it is easier for the political class to break the formal rules and ignore objective facts than to depart from the unwritten ideological imperative.

Today, despite the worsened situation, it seems to be ever more difficult for the EU's political class to change course. Doing so would imply that all the money spent on bailouts so far is lost – squandered on the fatal conceit of an ideological dream which is slowly turning out to be a nightmare.

One day soon, however, Europe will have to face reality. Either the EU is turned into a fiscal and political union, a genuine superstate where national debts are shared. Or the euro and possibly the EU disintegrate. :meeting: The former option is what the political class wants, but what the European people loathe. Hence, the growing rift between the people and their political leaders everywhere in Europe, but especially in Germany which is acting as the paymaster for the whole EU. This course is the more dangerous as it will lead to enormous political resentment in Germany. Eighty years ago, we saw what that can lead to.

The alternative is a disintegration of the eurozone. Here there are several scenarios. Greece may be forced to leave the euro, followed by Portugal, Ireland, Cyprus and Spain. According to last week's Economist, this will be a costly process. A Greek exit (Grexit) might cost €323 billion; an exit of Greece plus the four above mentioned countries might cost a staggering €1,155 billion.

A more likely scenario is for Germany to leave. A recent poll indicated that 51 percent of Germans think it is time to resurrect the Deutschmark. British journalist and economist Anatole Kaletsky thinks that a German exit from the euro could be relatively easy. According to Kaletsky, German departure would be less disruptive than Grexit for three reasons.

First, a Greek exit would lead to a domino effect with capital fleeing the next weakest country in the eurozone. There would be no domino effect if Germany leaves. Second, the eurozone would become more coherent without Germany and the remaining countries could use quantitative easing to bring down interest rates, issue jointly guaranteed Eurobonds and form a genuine fiscal union, with a public deficit of 5.3 percent of GDP and a gross debt of 90.4 percent of GDP – all comparing favorably to the deficit and debt levels in Britain, the U.S. and Japan. Third, a break-up caused by Germany withdrawing would be far less chaotic from a legal standpoint than a break-down in which the euro disintegrates as weak countries are pushed out. The euro without Germany would remain a legal currency, governed by the same treaties as before. Obviously, there would be costs for German companies, German banks and the Bundesbank, but these would all constitute local difficulties for Germany.

The benefits of a German exit (Gexit) are clear for Germany as well. It would incur costs, but these are one-time costs, while remaining in the euro entails Germany's paying indefinitely for debts made by others. Better a miserable end than endless misery.

A German exit would also be better for the American economy than the current situation, in which pressure is increasing on a country such as Spain. An economic collapse of Spain would inflict a severe blow to the U.S. stock exchanges. Rather than exerting pressure on German Chancellor Angela Merkel to accept a European fiscal union, which would mean political suicide for her, the United States might try to persuade her to leave the eurozone.

Gexit Is Better Than Grexit :: Gatestone Institute

 

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Almost 90% would 'consider moving abroad' for better financial prospects

Nearly nine in 10 Britons would consider leaving the UK for a better - and wealthier - life abroad within the next five years

The current recession combined with the perception that property is cheaper overseas and job prospects better collectively accounted for nearly a third of all reasons for emigrating, according to a survey by Skyscanner.

Sam Baldwin, Skyscanner's travel editor, said: "For many people the idea of 'living the dream' abroad is very alluring. The survey revealed that our perception of life abroad is very positive – perhaps overly so – and many people come back from a holiday enamoured with their destination. Interestingly, Spain and USA were two of the most popular places even though both countries are currently suffering from their own economic problems, which suggests that the dream of moving abroad to improve financial prospects may be just that - a dream.

The dream may be more realistic if, rather than moving abroad to look for new work, you are sent abroad as part of an existing job. Around 750,000 British workers are being posted abroad on assignments with their existing employer, and a massive 84 per cent believe this is helping them to climb the corporate ladder, according to the NatWest International Personal Banking (IPB) Quality of Life Index.

They also feel they benefit from an improved lifestyle, backing up the Skyscanner research results, and the increasing use of temporary global workers means that the traditional definition of 'expat' is now being blurred, said Dave Isley, head of NatWest International Personal Banking.

He added: "The growth of the global worker has brought with it an opportunity to share knowledge and experience around the world. The great brain exchange is a fantastic concept of other economies temporarily sharing the strengths of British workers.

Almost 90% would 'consider moving abroad' for better financial prospects - Telegraph

 

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Eurozone unemployment at fresh high

Unemployment in the eurozone hit a fresh high of 18.2 million in August, the EU statistics agency has said.

The number out of work rose by 34,000, but after the July data was revised up, it meant the unemployment rate remained stable at a record high of 11.4%.

The highest unemployment rate was recorded in Spain, where 25.1% of the workforce is out of a job, and the lowest of 4.5% was recorded in Austria.

The unemployment rate in Germany was 5.5%, Eurostat said.

'Lost generation'

Last week, the European Commission warned of the existence of "a real social emergency crisis" due to the fall in household income and growing household poverty.

Youth unemployment remains a particular concern, with the rate among under-25s hitting 22.8% across the eurozone, and 52.9% in Spain.

The commission repeated its call to governments and businesses to act to try to avoid the "disaster" of "a lost generation".

In Greece, the most recent figures recorded in June show that more than 50% of the young workforce has no job.

These two countries have by far the highest unemployment rate in the eurozone, as both governments look to cut spending and raise taxes to try and cut high debt levels.

These actions, which are needed in Greece to meet the terms of two huge bailouts and in Spain to restore confidence among international investors in Madrid's ability to repay its debts, have exacerbated the unemployment problem.

The eurozone as a whole is also struggling to generate the economic growth needed to stimulate employment. Its economy shrank by 0.2% between April and June, with Italy and Spain stuck in recession and France registering no growth for the past three quarters.

The notable exception is the German economy, Europe's biggest, which grew by 0.3% in the second quarter.

Across the wider 27-nation European Union, unemployment rose by 49,000 to 25.5 million people, Eurostat said, with the unemployment rate stable at 10.5%.

A commission spokesman said the total was "clearly unacceptable".

Compared with a year earlier, the unemployment rate rose in 20 countries, fell in six and remained stable in the UK.

By way of comparison, the unemployment rate in the US was 8.1% in August and 4.1% in Japan.

Child poverty fears

The European Commission said last week that disparities between the best and worst performing economies had continued to widen in the second quarter of the year.

It also expressed concern about the social situation, which remained "very serious".

The number of people experiencing financial stress remains historically high, it said in its latest quarterly review of the jobs situation across the European Union.

Household incomes had declined dramatically in Greece, where disposable incomes had dropped by 15.7% between 2009 and 2011, the commission said. Households in Ireland were living on 9% less.

Child poverty was also becoming an issue for an increasing number of households, particularly in countries where child benefits are inadequate.

Almost a fifth of families are at risk of poverty in Spain, Greece, Italy and Portugal, the review said.

BBC News - Eurozone unemployment at fresh high

 

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,
this pig is living in new national worries now days,

Cameron leans on cliches to avert British decline
11 October, 2012, 05:42

In an overtly patriotic speech filled with big conservative ideals, David Cameron called for Britain to sink or swim in a tough global world – but failed to say in any detail how it should be done.

**Cameron urged Britain to "sink or swim," telling delegates that the UK faced an "hour of reckoning." He insisted that only "effort and aspiration" can stop the UK from becoming a second-tier economy, which, like many countries in Europe, would be tied down by "fat welfare systems" and "unreformed public services."

He hammered home his message that only the coalition policy of economic prudence could pull Britain out of recession, while Labour's increased borrowing would be nothing short of economic suicide.

The welfare system formed a key part of his speech. The UK spent £90 billion a year on welfare, and a key policy of Cameron's coalition government has been to reduce this bill come what may.

And he was blunt at first glance with the facts, telling the country that more British children live in households where no one works than almost any other nation in Europe.

But Cameron didn't mention that over one million people in Britain are unable to find work, the highest figure in almost a generation.

On the economy, the prime minster was adamant that the austerity program his party has prescribed the UK is the right medicine. He insisted that Britain is "on the right track," but didn't mention that the UK is in a double-dip recession and has among the lowest growth rates of any developed country. Instead, he blamed the last Labour government, saying, "It's worse than we thought but we are making progress."

Cameron reiterated that the deficit had come down under his leadership, but he didn't explain why borrowing had gone up instead of down.

Nor did he mention the banks, which stood out against Ed Miliband's promise last week in his speech to the Labour Party, that if the banks don't regulate themselves, the government will step in and do it for them.

On taxes he went into attack mode. Rather than defend his government's policy of cutting taxes for 8,000 millionaires by 40,000 a year by next April – while forcing pensioners to pay more – he hit back at Labour's plans to spend more to create jobs, and in a quip at Miliband's rallying call that Labour is a party of "one nation," called them the party of "one notion – borrowing."

Cameron was clear about what he believes will get Britain out of the mess it's in: aspiration, entrepreneurial spirit and private enterprise. Here the PM had some cause for celebration, as last year more businesses were created than in any other year in Britain's history.

But he also skated over some of the more unpleasant facts about employment in the UK. His claim to have created up to one million jobs in the private sector is only true because of a change in how new jobs are classified.

He also claimed that the UK is first in the world in offshore wind power. Yet about 90% of the £1.5 billion spent building the massive London Array wind farm off the Kent coast went to foreign corporations.

Unsurprisingly, Cameron was big on the NHS. But a recent Tory-inspired shake-up of the health service has left critics arguing that GP's (family doctors in the UK) will be "suffocated, not liberated" by the changes.

Cameron praised the armed forces for their role in Afghanistan, asking everyone in the hall to stand to show their gratitude. But it is the armed forces that will bear the brunt of the government's spending cuts, while many senior figures in the military are warning that Britain will no longer be able to carry out such missions in the future.

On the police, in stark contrast to Miliband, Cameron didn't say a word. Twenty-four thousand police jobs have been written off because of austerity, including 6,800 front line officers. A poster outside the conference hall read "say hello to Dave, wave goodbye to your police service."

The Libdems, a vital part of his coalition government, were left out altogether. Instead, the PM decided to pan Labour while talking up his aspirational version of conservatism.

Subjects causing any deep divisions in the Conservative Party were also omitted. There was no mention of an EU referendum, something that many in the party are calling for, and none either of the thorny issue of marriage equality.

Cameron, backed by the Libdems, has tried to push for gay marriage as consistent with his conservative values of fairness, commitment and the importance of the family. But it hasn't gone down well with the traditional grassroots Tory activists.

On Scotland, Cameron was also reticent. He talked a lot about the Olympics and the enormous pride he felt in our athletes, and that they draped themselves in the union flag, regardless of whether they were from England, Scotland, Wales or Northern Ireland, saying that as one nation, Britain would rise together. His speech provoked outrage from the SNP (Scottish National Party), which labeled his backing to keep the union a "campaign that is all about what is best for Westminster."

On education, the PM was passionate. He cited plans for up to 79 new free schools – independent but funded by the state – and the 2,000 academies (schools responsible for their own management and budget) that have already been created while the collation government has been in power. Cameron himself went to Eton, one of the country's most expensive and prodigious fee-based boarding schools.

But his plans drew criticism from Christine Blower, the NUT (National Union of Teachers) general secretary. She commented in The Guardian that the academy program is developing a fragmented and unaccountable education system, and that secondary school places are being set up where primary places are needed most.

The PM was firmly businesslike, appealing to the "aspiration nation," and unlike Miliband – who last week memorized his speech to the Labour party – Cameron read from an autocue, saying that as prime minister he was too busy to memorize a speech.

He was defensive about comments that he was from the party of privilege and that he went to a 'posh school,' and fought back with: "I went to a great school and I want every child to have a great education. I'm not here to defend privilege; I'm here to spread it."

Cameron leans on cliches to avert British decline (Op-Ed) — RT

 

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a certain destiny they are moving in, in fact, Greece is just a start

Reuters

ATHENS/LONDON: In Athens, the homeless are on the streets in growing numbers, soup kitchens feed twice as many people as a year ago, and the poor are diving into garbage bins in search of scrap they can sell.

Greece is close to breaking point as it struggles with austerity targets set by creditors, but this is just a foretaste of the nightmare of unrest, hunger and even anarchy that could engulf the debt-crippled nation if it is forced out of the euro.

If the exact economic impact of such a move is hard to nail down - newly issued drachmas devalued by up to 70 percent, runaway inflation, a banking meltdown, a collapse in trade - the implications for ordinary Greeks crushed by the debt crisis are even harder to predict.

Without international bailout cash, salaries and pensions would go unpaid and violence, political extremism and uncontrolled emigration could quickly follow.

After voting inconclusively for parties that opposed foreign-imposed austerity, including the neo-Nazi Golden Dawn, Greeks head to the polls again in a month's time. This election is being portrayed internationally as a referendum on the single currency, even if Greeks do not yet see it that way.

A Greek exit from the 17-nation euro zone, or "Grexit" as some economists have called the once unthinkable eventuality, risks turning the nation into what would be close to a failed state on the edge of the European Union, one of the most prosperous societies the world has ever known.

Greece imports 40 percent of the food it consumes, nearly all of its oil and natural gas and much of its medicine. It has long been clear to some commentators that there could be trouble ahead.

Confronted with post-exit turmoil, foreign suppliers would simply put up the shutters until the situation becomes calmer, leading to acute shortages of basic commodities, which could fuel serious civil unrest, according to Bank of Greece Governor George Provopoulos.

Even if Greece did manage to import limited amounts of food and other basics, they would be cripplingly expensive.

Provopoulos warned as long ago as December that a return to the drachma would be "real hell", with Greeks forced to resort to barter during the transition period between the two currencies, "trading a kilo of olive oil for three kilos of flour".


"NIGHTMARE SCENARIO"

"There will be shortages in basic staples. Without fuel, the army and the police would not be able to move their vehicles. After a long period, things will return to a better balance. But during the first transitional phase we would be experiencing a nightmare scenario," Provopoulos said.

A former finance minister, Yiannos Papantoniou, saw trouble ahead nearly a year ago: "Greece would not be able to support 11 million people so there will be huge emigration flows," he told Reuters Insider television last July. "Disruptions, social disruptions will come. I would say a regime of total anarchy."

Last year 23,800 Greeks emigrated to Germany alone, 90 percent more than the previous year , German data show and Greeks are queuing up to learn German.

Most economists agree the austerity measures Greece is labouring under offer it little hope of recovery near term, and some argue that if it leaves the euro, it could export its way back to health on the back of a vastly devalued currency.

Nightmare foretold if Greece heads for euro exit | Reuters

 

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Switzerland arming in preparation for European meltdown
12 October, 2012

The Swiss Army is preparing contingency plans for violent unrest across Europe. A nation mostly famous for its banks, watches and chocolate fears it may face a massive influx of European refugees in the near future.

One of the world's richest nations openly expressed concerns over the possible outcome of Europe's continuing financial troubles, and is currently conducting army exercises against the possibility of riots along its borders.

In September, the Swiss military conducted exercises dubbed 'Stabilo Due,' with scenarios involving violent instability across the EU.

Switzerland has maintained an avowedly neutral stance for decades, and refused to join the eurozone when presented with the opportunity.

Bern's biggest fear is likely the disorganization of neighboring nations' armies that would follow general instability; the eurozone crisis and the severe austerity measures in the EU are forcing member-states to significantly slash their military budgets. If protest continues to spread across Europe, police and armed forces may find themselves ill-equipped to manage the unrest.

"I will not rule out that we will need the army in the coming years," Swiss Defense Minister Ueli Maurer said last Sunday.

The Swiss Defense Ministry has pressed ahead to modernize the country's army despite political opposition. With its multibillion-Franc military budget and an army of around 200,000 soldiers, the country also plans to purchase new 'Saab Gripen' jet fighters.

Switzerland arming in preparation for European meltdown? — RT

 

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Britain is losing the economic Olympics

As London prepares for another display of British pageantry and good humor to match the unlikely triumph of last month's rain-sodden Royal Jubilee, a less impressive aspect of Britain's stoical "stiff upper lip" may detract from the national pride associated with hosting the Olympics. In the global race out of recession, Britain has just been revealed as a prime contender for the wooden spoon.

Not only was the shocking drop of 0.7 percent in Britain's second-quarter GDP reported on Wednesday much bigger than investors and independent economists had expected but it almost matched the 0.8 percent fall in Italy's GDP the previous quarter. And that Italian drop holds the record for the biggest quarterly contraction suffered by any G7 country since the immediate aftermath of the Lehman crisis. Much more important than such statistical trivia is the fact that Britain's economic output is still 4.5 percent below the peak level it reached in the first quarter of 2008, more than four years ago. The U.S. and German economies, by contrast, are now significantly bigger than they were before the crisis and, in this sense at least, have left the recession behind them. And even the euro zone as a whole, despite the severity of its financial crisis, has done much better than Britain, with GDP just 2 percent below its peak in 2008.

National economic performance is not, of course, a competitive Olympic sport, and there is more to economic success than GDP growth. Still, there is a good reason for connecting the Olympics with economics: International competitions and comparisons can teach useful lessons and create incentives to improve economic management.

The most instructive international comparison at present is between the British and American efforts to clamber out of recession and financial crisis. This race is about as close as economics can get to a controlled experiment of the kind favored by natural scientists, in which sharply different policies are applied to two countries with broadly similar structures and initial conditions, facing similar economic problems.

In 2008, the U.S. and Britain were two advanced economies with large financial sectors, dangerous housing bubbles, heavy consumer debt and similar government deficits and debt levels relative to GDP. Both suffered extremely severe banking crises that forced their governments to take on huge additional liabilities by guaranteeing their biggest banks. For two years after the Lehman crisis in September 2008, the two economies followed broadly similar policies: slashing interest rates to zero, allowing large expansions of their budget deficits and financing the resulting debt with newly printed money. The two economies moved closely in tandem, as economic theory would have predicted: both on the way down until mid-2009 and then on the way up until mid-2010.

But then, in the summer of 2010, the newly elected British government set a radically different course for one very specific and controversial aspect of economic policy – government borrowing. Instead of simply tolerating the big budget deficits that had resulted from weak economic growth, as both the U.S. and British Treasuries had done until 2010, David Cameron decided his top priority would be to reduce government borrowing. He planned to do this by slashing public spending and imposing substantially higher tax rates. The U.S. government, meanwhile, continued with a fiscal policy of benign neglect. Despite all the sound and fury in Washington about deficits and debt limits, U.S. tax rates and public spending plans remained broadly unchanged through 2011 and 2012, with a small cut in payroll taxes largely offsetting the fiscal impact of cuts in local government spending and employment. In all other respects conditions in the two economies remained unchanged. Both central banks continued to print money and to keep interest rates near zero. The dollar and the pound moved very little against one another, and exports grew moderately in both countries, despite the crisis in the euro zone. In short, this really was a controlled experiment on the impact of different fiscal policies.

Curiously enough, the two economies began to diverge from the moment this controlled experiment started, with the British economy contracting in the third quarter of 2010, while growth accelerated in the U.S. In the period since then, the U.S. economy has expanded by 2.7 percent, while Britain has contracted by 0.8 percent. The latest results of this experiment will be revealed on Friday, when the U.S. GDP figures are published and can be compared with the 0.8 percent fall in British GDP just announced.

It may be said, of course, that the British policy of fiscal consolidation was still justified, even if the U.S. enjoys much stronger growth, as it almost surely will. After all, controlling public debt and deficits is an important national objective that counts for more than simply juicing up short-term growth.

But this is where we get to the really significant and surprising feature of the race out of recession. Britain's heroic spending cuts and tax increases imposed by the Cameron government may contrast starkly with lassitude and cowardice displayed by politicians in Washington. But this dramatic political contrast has made absolutely no difference on the debt and borrowing outcomes the two countries have actually achieved, because the British austerity has simply prolonged recession, while U.S. fiscal laxity has allowed the economy to grow. According to the latest IMF figures, published two weeks ago, the U.S. budget deficit has been reduced from 10.5 percent of GDP in 2010 to 8.2 percent in 2012. This reduction is a slightly bigger reduction in the deficit than Britain has managed to achieve in the same period – from 9.8 percent to 8.1 percent.

In short, any country determined to control public borrowing should forget about fiscal austerity and instead do everything to grow as fast as it can – a fitting economic message from Olympic Britain.

Britain is losing the economic Olympics | Anatole Kaletsky

population growth rate of US is around 0.9% per year and hence there might be around 4% more people in US by mid 2012, as compare to early 2008. and even if its economy is now around 2% higher than its peak of mid 2008, per capita income on real term would be around 2% less than its peak of early 2008, on PPP term adjusting inflation. but US is still better than UK whose per capita income is around 7.5% less than its peak of early 2008..........

but the worse thing about both of these two economy is, Public Debt level of US was around 70% in early 2008 but now its 105% and that of UK was around 44% in early 2008 while now its 86% at the end of 2011. hence, these two economies are only borrowing to pay for the expanses/bail-outs but still they are on a slow pace of decline....

while even if GDP growth rate of India was the slowest last year, than for last over 10 years, it was still on 6.5% .........

List of countries by public debt - Wikipedia, the free encyclopedia

 

[hello_10]

here we have Per Capita Estimate of UK by June 2012. its was 6,085 Ponds by Q4 2007, as per the prices since 1948, and it then reduced to 5,652 Ponds by June 2012, around 7.1% less than its of Q4 2007. (under the last column "Per Capita Chained volume measures: Seasonally adjusted") as below:

https://docs.google.com/spreadsheet/ccc?key=0AonYZs4MzlZbcGhOdG0zTG1EWkVPX1k1VWR6LTd1U3c#gid=10

its because of the fact that population growth rate of Britain is around 0.6% per year, hence having around 2.7% more population by Q2 2012, as compare to Q4 2007

this table also show 1% jump in UK's GDP by Q3 2012, which is because of increased spending due to Olympics. so its more wise to check this table after Q4 2012 result

 

[hello_10]

Almost 90% would 'consider moving abroad' for better financial prospects

Nearly nine in 10 Britons would consider leaving the UK for a better - and wealthier - life abroad within the next five years

The current recession combined with the perception that property is cheaper overseas and job prospects better collectively accounted for nearly a third of all reasons for emigrating, according to a survey by Skyscanner.

Sam Baldwin, Skyscanner's travel editor, said: "For many people the idea of 'living the dream' abroad is very alluring. The survey revealed that our perception of life abroad is very positive – perhaps overly so – and many people come back from a holiday enamoured with their destination. Interestingly, Spain and USA were two of the most popular places even though both countries are currently suffering from their own economic problems, which suggests that the dream of moving abroad to improve financial prospects may be just that - a dream.

The dream may be more realistic if, rather than moving abroad to look for new work, you are sent abroad as part of an existing job. Around 750,000 British workers are being posted abroad on assignments with their existing employer, and a massive 84 per cent believe this is helping them to climb the corporate ladder, according to the NatWest International Personal Banking (IPB) Quality of Life Index.

They also feel they benefit from an improved lifestyle, backing up the Skyscanner research results, and the increasing use of temporary global workers means that the traditional definition of 'expat' is now being blurred, said Dave Isley, head of NatWest International Personal Banking.

He added: "The growth of the global worker has brought with it an opportunity to share knowledge and experience around the world. The great brain exchange is a fantastic concept of other economies temporarily sharing the strengths of British workers.

Almost 90% would 'consider moving abroad' for better financial prospects - Telegraph

Working for nothing – the truth about low pay in the UK
Sunday 2 October 2011

New research indicates that more than 20% of British employees are earning less than a living wage

Workers on the bottom rung of the earnings ladder received a leg up on Saturday, as the national minimum wage increased from £5.98 to £6.08. But new research shows that as many as 5 million people higher up the scale are barely earning enough to make ends meet.

Thinktank the Resolution Foundation has looked at workers up and down the country earning less than a "living wage". It found that more than one in five employees falls into this group, echoing recent work by the TUC, which uncovered what it called a "livelihood crisis" among the growing swathe of the workforce stuck in low-paid jobs.

In London, there is an official "living wage" endorsed by the mayor, Boris Johnson, and currently set at £8.30 an hour. It's intended to be the least amount required to pay for what most people consider to be basic necessities and a "minimum acceptable quality of life".

Loughborough University's Centre for Research in Social Policy, considered the authority on the issue, calculates that outside the capital, you need £7.20 an hour.

Using official earnings figures, Resolution finds that in some parts of the country, almost a quarter of the workforce are taking home less than this. They range across a wide range of sectors, from sales, where 60% of workers earn less than the living wage, to personal services such as hairdressers and childminders (33%).

"It brings to life just how pervasive low pay is in modern Britain," says Resolution's chief executive, Gavin Kelly. "Many people on higher incomes would assume it only exists on the fringes, not the mainstream."

Instead of being a short-term result of the recession of 2008-09 and the lacklustre recovery, Kelly sees the increasing problem of low pay as being the result of a long period when the fruits of economic expansion failed to feed through to those at the bottom of the pile. "It shows you what it looks like after a long period of growth, and it makes you raise questions about the nature of that growth and who it benefited," he says.

Resolution's report says: "Historically, periods of economic growth have led to growing wages for ordinary workers, ensuring rising living standards for all households. But this connection between growth and gain for workers has started to fray in recent years."

Nicola Smith, head of economics and social affairs development at the TUC, says structural changes, such as the decline of the manufacturing sector, have hollowed out the skilled-jobs sector that once made up a large proportion of the workforce, resulting in a polarisation between high-paying "knowledge economy" jobs, monopolised by graduates, and a "long tail" of lower-skilled workers struggling to get by. :meeting:

"Over the past decade, there's been a loss of about 1.5m jobs in manufacturing," she says. Meanwhile, a long period of rapid expansion in highly paid industries such as banking, and the increasing prevalence of share awards and bonus payments, helped earnings at the top of the scale to race away from the rest.

Resolution's research shows that low-paid workers are disproportionately female, part-time, and concentrated in the private sector.

Smith says that could mean the number of low-paid jobs will increase as government cuts bite: "The public sector has until now played a large role in creating middle-income jobs for people with skills."

Recent research by the TUC showed that the erosion of living standards for lower-paid workers is a very long-term phenomenon: while incomes for the top 10% of earners doubled in real terms between 1978 and 2008, they increased by just 27% for the bottom tenth.

Whether they are called the "squeezed middle", "hard-working families" or the "deserving poor", there is little agreement about what to do to improve their lot – and politicians are divided about how to win their support.

Liberal Democrats are proud of persuading the Tories to adopt their policy of raising the personal income tax allowance, which helps to take the lowest-paid out of tax altogether.

However, the increase in the allowance also benefits many earners higher up the income scale, causing some analysts, such as the Institute for Public Policy Research (IPPR), to warn that it is badly targeted.

There are also fears that a series of changes to the tax and benefits system introduced by George Osborne and Iain Duncan Smith, including the reduction in the childcare element of the working tax credit, could act against the increase in the allowance, and make life harder.

Ed Miliband's speech to the Labour party conference suggested that he takes a top-down approach to the issue, advocating putting workers' representatives on companies' remuneration committees to argue the case for fairer pay and helping to rein in excessive rewards at the top.

Smith says the government must also think about ways to encourage key sectors, such as the sciences and creative industries, which employ relatively large numbers of more skilled workers. "It's the challenge of creating better quality jobs," she says.

A more direct approach is bottom-up agitation. In the capital, the Living Wage campaign, run by London Citizens, a coalition of religious leaders, community activists and trades unionists, was launched a decade ago to highlight the plight of many workers doing jobs essential to the smooth running of London.

An army of cleaners, drivers, shop-workers and so on, many of them migrant workers, were unable to earn enough to afford to eat decent food, keep a roof over their heads, or spend any time with their families.

"You're talking about people getting up at 4am to get two night buses to work, and sending money back to their families in Ghana," says Andy Hull of the IPPR, who is involved in London Citizens.

London Citizens has used the full battery of campaigning tactics, including noisily invading the offices of Goldman Sachs, and tabling questions at HSBC's annual meetings, to persuade employers to pay their staff more generously, and offer longer-term contracts.

Hull says: "You need the top-down and the bottom-up; you need to apply pressure." London Citizens has a meeting with Tesco on Wednesday, in its latest attempt to persuade the mega-retailer to extend the relatively generous wages that it pays its shopfloor staff to thousands of sub-contracted cleaners, security guards and delivery drivers. "At least a dialogue is happening," Hull says.

He adds: "The argument that no one should do a day's work for less than a wage they can live on is a hard one to disagree with."

Working for nothing

 

[hello_10]

unemployment rate of UK is close to 8% and if more than 20% employed workers there dont get even living wage also then I wonder, what would be the condition of these Unemployed 8% of Britain????? one more news on this topic as below

Britain bears costs of jobs without growth
Reuters Oct 8, 2012

LONDON: A near-record number of Britons are in work despite a shrinking economy, but new employment has come at the expense of pay and job security, capping any boost to vital consumer spending.

Britain's economic output is now 4 percent lower than in the first quarter of 2008, just before the slump that followed the global financial crisis, while the number of people in work has risen to 29.56 million, close to an all-time high.

But the new jobs, many of which are precarious and low-paid, have failed to encourage consumers to spend, blunting the boost to the economy higher employment normally provides.

Jobs growth may also run out of steam. Disappointing recent data has dimmed hopes of a meaningful economic recovery in Britain, which has been mired in recession since late last year.

For now, thousands of Britons are having to accept either a fall in real income, low job security or having to toil more for the same earnings just to stay in work.

"Wages staying quite low and below inflation prices people into work," said Kevin Green, head of the Recruitment and Employment Confederation, which represents Britain's recruiters.

"Employers are trying to keep their fixed costs down ... Whereas we used to see lots of temps, flexible working happening in the low-skill, retail, office professionals type-of-activity, we now see that growing in the professional groups."

'Jobs without growth' has been a conundrum for economists in the past year, translating into a steep fall in productivity which even the central bank struggles to make sense of.

Explanations range from inaccurate GDP statistics to the effects of the financial crisis constraining the economy's ability to grow, while debate has focused recently on the kind of jobs being created and what they mean for growth.

Sean Cannon, who set up a business with his brother in 2010 selling British fine foods, is a case in point. He left his job as a youth worker following deep cuts in funding and now works about twice as many hours for a similar income.

Would he still recommend starting a business? "I'd recommend it if you are prepared to literally give up all of your social life," he said in his small deli, Cannon & Cannon, in the London district of Brixton, where jars of pickled pears and tapenade line the shelves.

In the past four years, self-employment and part-time work have grown strongly, while full-time jobs have fallen.

There are also now more temporary workers as a share of all employees, and a much larger proportion of people say they are working part-time or on temporary contracts because they could not find full-time or permanent work.

http://articles.economictimes.india.../34322878_1_job-security-jobs-growth-new-jobs

 

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Income inequality growing faster in UK than any other rich country

Top 10% have incomes 12 times greater than bottom 10%, up from eight times greater in 1985, thinktank's study reveals

Income inequality among working-age people has risen faster in Britain than in any other rich nation since the mid-1970s, according to a report by the OECD.

The thinktank says the gap has come about due to the rise of a financial services elite who, through education and marriage, have concentrated wealth into the hands of a tiny minority.

Economists from the group, which is funded by developed-world taxpayers, say the annual average income in the UK of the top 10% in 2008 was just under £55,000, about 12 times higher than that of the bottom 10%, who had an average income of £4,700.

This is up from a ratio of eight to one in 1985 and significantly higher than the average income gap in developed nations of nine to one.

However, the report makes clear that even in countries viewed as "fairer" – such as Germany, Denmark and Sweden – this pay gap between rich and poor is expanding: from five to one in the 1980s to six to one today. In the rising powers of Brazil, Russia, India and China, the ratio is an alarming 50 to one.

The OECD warned about the rise of the top 1% in rich societies and the falling share of income going to poorer people.

This trend is especially pronounced in Britain, where the dramatic rise in inequality has been fuelled by the creation of a super-rich class. The share of the top 1% of income earners increased from 7.1% in 1970 to 14.3% in 2005.

Just prior to the global recession, the OECD says the very top of British society – the 0.1% of highest earners – accounted for a remarkable 5% of total pre-tax income, a level of wealth hoarding not seen since the second world war.

At the same time as accumulating great wealth, the rich have seen tax rates fall. The top marginal income tax rate dropped from 60% in the 1980s to 40% in the 2000s, before its recent increase to 50%.

The buildup of riches was partly economic: the higher-paid worked longer. Since the mid-1980s, annual hours of low-wage workers remained stable at around 1,050, while those of high-wage workers rose almost 10% to 2,450 hours.

But the concentration of resources in the highest rungs of Britain's society was also a social phenomenon. Unlike in many other nations, the earnings gap between the wives of rich and poor husbands in Britain has grown from £3,900 in 1987 to £10,200 in 2004.

Although the OECD figures stop just before the recession, experts say the trend continued into the downturn.

Paul Johnson of the Institute for Fiscal Studies said that in the UK "2009-10 incomes went up incredibly fast (at the top end) possibly because the new top rate of tax was coming in".

He pointed out that the growth in the City and bankers' bonuses had played a large part in creating this divide. "If you look at who is racing away, then half the top 1% of high earners work in financial services," he said.

He cited the research of Mark Stewart, a professor of economics at Warwick University, who has shown that "almost all the increase in inequality has come from financial services" in the past 12 years.

Such disparities, the thinktank said, could not be blamed on globalisation but a trend in labour and social policies in rich nations that had helped the wealthy.

Although spending on public services in Britain had gone up in the past decade, at the same time benefits to the poor were worth less and taxes were less redistributive.

The effect has been a dramatic weakening in the state's ability to spread wealth throughout society. From the mid-70s to mid-80s, the tax-benefit system offset more than 50% of the rise in income inequality. It now manages just 20%.

The OECD warned of sweeping consequences for rich societies – and pointed to the rash of occupations and protests, especially by young people, around the world. "Youths who see no future for themselves feel increasingly disenfranchised. They have now been joined by protesters who believe they are bearing the brunt of a crisis for which they have no responsibility, while people on higher incomes appeared to be spared," the OECD said.

It was a paradox, said the OECD, that such moves had not been grounded in popular support. Michael Förster, author of the OECD's Divided We Stand report, said: "In almost all countries apart from the US and Japan, more than 50% of people say that inequality is too high. In the UK, it is 65% so I think everyone agrees it is a problem."

To rebalance society "for the 99%", the authors call for a series of measures focusing on job creation, "increased redistributive effects" and "freely accessible and high-quality public services in education, health and family care".

When it was pointed out that British government plans would instead lead to public sector job cuts of 710,000, more child poverty and a hike in university fees, the OECD's authors said debt was an issue for governments but urged them "not to cut social investments".

Monika Queisser, the head of OECD's social policy division, said: "The OECD agreed that fiscal consolidation was important. We want to governments to see social expenditures as investment so we would want to see, say, early years [funding] rising."

Income inequality growing faster in UK than any other rich country, says OECD | Society | The Guardian