Mon, Oct 14, 2013 - Page 9 News List

Austerity pushing EU into new Dark Age: study

A critical study of the bloc’s response to the debt crisis has found that austerity is driving up unemployment, widening inequality and increasing the risk of social unrest as the number of poor people swells drastically

By Ian Traynor  /  The Guardian, BRUSSELS

The problems are also affecting Europe’s wealthiest societies, such as Denmark and Luxembourg, the study found.

In the Baltic states and Hungary, up to 13 percent of the populations have left in recent years due to economic hardship. The study reports a mounting trend of intra-European migration, mainly from east to west, in search of work.

The jobs crisis is one of the most debilitating issues facing the EU and the eurozone. Of more than 26 million unemployed in the EU, those out of work for longer than a year stands at 11 million, almost double the level of five years ago when the international financial crisis broke out in the US.

The social impact is immense, the study found. In Greece and Spain, adult children with families are moving back in with their parents, several generations are living in single households with one breadwinner between them. It is now a common sight to find formerly prosperous middle-class men and women sleeping rough in Milan, Italy’s financial capital.

Youth unemployment figures in a quarter of the countries surveyed ranged from 33 percent to more than 60 percent. Yet as destructive to families is the soaring jobless levels among 50 to 64-year-olds, which has risen from 2.8 million to 4.6 million in the EU between 2008 and last year, the report said.

“The rate at which unemployment figures have risen in the past 24 months alone is an indication that the crisis is deepening, with severe personal costs as a consequence, and possible unrest and extremism as a risk. Combined with increasing living costs, this is a dangerous combination,” the study said.

Despite the perceived success of Germany — Europe’s economic engine — the study takes the EU’s biggest country to illustrate the widening wealth gap, raising questions about the longevity of the EU’s traditional model: the social market economy. According to Germany’s Bertelsmann Foundation, about 5.5 million Germans have lost their middle class social status over the past decade and fallen into the ranks of low-income earners, while at the same time, half a million others made the grade as high-income earners.

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