Greece had an unemployment rate of 25.8% in November (it reports numbers later than the rest of the nations in the euro area). Spain’s was 23.4% in January. In both nations, the unemployment rate among people under 25 is 50%, which is hard to comprehend.
Most of the world’s attention about countries in the euro area has been on Greece and its rebellion against austerity. Its government has gotten an extension to the terms of the aid from its neighbors. That may not last more than four months. Greece has promised it will come up with a plan to repay at least part of the money, and at the same time rescue its economy. Part of the plan is to collect individual taxes, in a country where dodging taxes has a long tradition. However, if Greece can solve that problem, which would require many more tax collectors than it can afford, its gross domestic product will not recover with a jobless rate roughly equal to that of the United States during the Great Depression. The United States had tools almost a century ago to drive down unemployment that Greece does not have.
Spain’s situation is not much better than Greece’s, although some sectors of its economy could lead it out of recession. It remains a large manufacturer and a maker of consumer products. However, so far that has not triggered a sharp drop on unemployment.
A careful look at the euro area employment numbers for January shows that the jobless rate at 11.2% is helped by the unemployment rate among certain large nations, like Germany, where the unemployment rate is 4.7%. The way that helps the overall average masks the problem in the worst-off economies.
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