Tragedy of the Euro

A grim tale out of Europe today in the Financial Post

BRUSSELS — Eurozone unemployment has risen to its highest level since the euro single currency was introduced, data showed on Tuesday, a day after EU leaders promised to focus on creating millions of new jobs to try to kickstart Europe’s floundering economy.

Seasonally adjusted unemployment among the 17 countries sharing the euro rose to 10.4% in December, on a par with an upwardly revised November figure, the European Union’s statistics office Eurostat said.

It was the highest rate since June 1998, before the introduction of the euro in 1999.

“We’re looking at a further increase over the coming months, so that is worrying,” said Martin van Vliet, an economist at ING. “Look at Greece, where unemployment is some 20%, and it is 23% in Spain. At a certain point this could lead to political unrest.”

After two years of a deep debt crisis and budget austerity, the number of Europeans out of work has risen to 16.5 million people, with another 20,000 people without a job in December from the month before. The rate steadily crept up through 2011 as growth stalled and recession loomed.

Of course Eurocrats are only interested in destroying the economy, not getting out of the way and allowing it to flourish.

The most obvious destruction has come in the form of the “Green Jobs” sector, a massive government boondoggle.

The Spanish recently threw out their socialist government over their terrible economy and a 22 percent unemployment rate.

Green technology was supposed to be Spain’s path to more jobs and a cleaner more prosperous future. It wasn’t.

“Politicians told us some years ago that they found a new way of investing or doing public investing in a new sector, in the renewable energies, that would create a sort of new economy with new jobs, green jobs, so called green jobs,” Dr. Gabriel Calzada Álvarez, with King Juan Carlos University in Madrid, said.

But what the Spanish got was a big helping of a Solyndra style business debacle: a lot of taxpayer money down the drain and jobs that cost a fortune to create.

A Job Killer

Calzada, an economist, studied Spain’s green technology program and found that each green job created in Spain cost Spanish taxpayers $770,000. Each Wind Industry job cost $1.3 million to create.

“President Zapatero, for example, when he came in to power, said he knew, ‘he knew’ that solar energy was the future,” Calzada said. “He ‘knew’ this, so he put all the public money and investment into this model.”

But Calzada’s study found that for every four jobs created by Spain’s expensive green technology program, nine jobs were lost.

Electricity generated was so expensive that each “green” megawatt installed in the power grid destroyed five jobs elsewhere in the economy by raising business costs.

And what does the future hold? From Philip Bagus’ excellent book, “the Tragedy of the Euro” You can read it free here

The institutional setup of the EMU has been an economic disaster. The Euro is a political project; political interests have brought the European currency forward on its grievous way and have been clashing over it as a result. And economic arguments launched to disguise the true agenda behind the Euro have failed to convince the general population of its advantages.

The Euro has succeeded in serving as a vehicle for centralization in Europe and for the French government’s goal of establishing a European Empire under its control—curbing the influence of the German state. Monetary policy was the political means toward political union. Proponents of a socialist Europe saw the Euro as their trump against the defense of a classical liberal Europe that had been expanding in power and influence ever since the Berlin Wall came down. The single currency was seen as a step toward political integration and centralization. The logic of interventions propelled the Eurosystem toward a political unification under a central state in Brussels. As national states are abolished, the market place of Europe becomes a new soviet union.

One Response to “Tragedy of the Euro”

  1. mstob says:

    Bagus' book is great. I especially liked the chapter explaining why Germany joined the Euro. His explanation of French and German policy makers' plans is very interesting stuff.

    It is interesting to note that the Euro, and politically united Europe seem to be something that almost all people, regardless of political stripe, seem to take for granted as necessary. Liberal, conservative, etc., it is always a bad idea to question the idea of a "united" Europe (Euro, European parliament, etc.) in front of so many people.

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