Tuesday, 2 November 2010

Unemployment in Europe: UK, Cyprus and the success of Malta

The latest budget cuts in England made by Cameron, were made on the assumption that the private sector will pick up the slack in the labour market. However a recent report by the Chartered Institute of Personnel and Development (CIPD) launched a devastating attack on this suggestion by announcing that the spending cuts and VAT rise to cost 1.6m jobs. This is apowerfull a call to action against the excessive "slash and burn" cuts proposed by the conservative party.




Up to now the only silver lining in Britain recession was the fact that it managed to keep unemployment levels lower than the US or other European countries: Unemployment peaked at 7.8% when larger economies are facing a recovery with stubbornly high unemployment such as the Case of the USA (9.2%) and France (10.1%). These cuts, in their rapidity and suddenness, along with the rise of VAT will cause a leap in UK unemployment undermining the only positive news since the recession was officially ended with the recovery of GDP to positive levels.



On another note is the alarming and meteoric rise of unemployment in Cyprus which began in the end of 2008. It is noteworthy that our rise has perhaps one of the most sudden in the EU outside the former eastern block countries. Malta has managed to ride the recession in terms of unemployment quite well, and once again it shows us how small open economies that are good in exploiting the opportunities offered by the EU (both in terms of competitive service provision and absorbing EU funds) can do very well for themselves.

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