There is uncertainty in the world’s financial market as tensions resurge in Europe, a lingering result of the 2008-2009 economic crisis.
The World Bank said high debt levels and high deficits mean that people can expect a volatile future for the next while “as it will take years of concerted political and economic effort before debt to GDP levels . . . are brought down to sustainable levels.”
To address the crisis, several countries are turning to austerity measures.
The Organisation for Economic Co-operation and Development (OECD) said that austerity is only a medium-term policy and can have a negative impact short-term and start “a negative feedback loop.”
In Spain, the crisis is extreme. Up until 2007, the country experienced employment growth and cut the unemployment rate from 25 per cent in the 1990s to eight per cent in 2007 – its lowest level in almost 30 years.
But of all OECD countries, of which there are over 100, Spain’s unemployment rate rose the most between the fourth quarter of 2007 and the second quarter of 2010 – in the country, construction and manufacturing sectors have been hit the hardest.
There is a particularly high unemployment rate – doubled, in fact, since 2007 – among young people, especially those between ages 15 and 24, like many university students.
A particular problem in Spain, as opposed to other OECD countries, is the heavy reliance on temporary, contract workers which has negatively affected the unemployment rate.
Source— Organisation for Economic Co-operation and Development (OECD)
