Europe’s Leaders Paralysed as EMU Jobless Rate Hits Record High

Posted by Stephen Cook on April 3, 2013

Spain remains the hardest hit of the large economies with a jobless rate of 26.3pc. Youth unemployment is above 60pc across large parts of the country Photo: AFP

Europe’s Leaders Paralysed as EMU Jobless Rate Hits Record High

By Ambrose Evans-Pritchard, The Telegraph, UK – April 2, 2012

http://www.telegraph.co.uk/finance/financialcrisis/9967812/Europes-leaders-paralysed-as-EMU-jobless-rate-hits-record-high.html

Eurozone unemployment reached a record 12pc in February and looks certain to ratchet higher as fiscal cuts deepen and manufacturing continues to struggle, raising the spectre of social explosion across southern Europe.

A total of 19m people were out of work in the 17-member bloc in February, the European Union’s statistics office said on Tuesday, a rise of 1.77m on the same month last year.

Greece was the worst affected, with unemployment at 26.4pc, but Spain remains the hardest hit of the large economies with a jobless rate of 26.3pc. Youth unemployment is above 60pc across large parts of the country. Almost 2m jobless workers have been out of work so long in Spain that their benefits have expired.

“Such unacceptably high levels of unemployment are a tragedy for Europe and a signal of how serious a crisis some eurozone countries are now in,” said EU jobs commissioner Laszlo Andor.

At the other extreme, the jobless rate was 4.8pc in Austria and 5.4pc in Germany, a North-South chasm that makes it increasingly difficult to fashion a viable policy response within the limits of monetary union.

France slipped deeper into the southern camp, shedding 20,000 to 30,000 jobs each month and unemployment hit a post-monetary-union high of 10.8pc.

President Francois Hollande gave a hostage to fortune last year, exhorting voters to judge him by his success in “bending the curve” of jobless figures.

He gave a second hostage by agreeing to push through the toughest budget cuts since the Second World War – fiscal tightening of 2pc of GDP this year, in the midst of a triple-dip recession – to meet EU deficit targets. The two objectives are now in flagrant contradiction.

The grim jobs data came as Markit reported a fresh slide in eurozone manufacturing PMI surveys to 46.8 in March, with dire figures for France, Italy and Spain. The slight bounce earlier this year appears to have been a false dawn.

“The authorities keep saying there is going to be a recovery in the second half of 2013, but do they really believe their own story any longer?” said Marchel Alexandrovich, an analyst at Jefferies. “The risk is a Japanese-style situation where there is just no growth and debt dynamics get worse.”

Europe’s policymakers have misjudged the severity of the downturn at each stage over the past two years, yet have brushed aside calls from the International Monetary Fund for a change in strategy.

It is unclear how much longer this can continue, after Italy’s earthquake election in February and amid rising anger among Europe’s labour movement. “Austerity is a failure. It has not succeeded in reducing deficits and is having a devastating social and economic effect,” said Bernadette Ségol, head of the European Trade Union Confederation (ETUC).

All attempts to form a government in Rome have so far failed. The three key parties have repudiated the EU’s austerity strategy in any case, leaving it unclear whether the European Central Bank’s conditional back-stop for Italy’s bond markets is still valid.

“Italy has become ungovernable,” said sovereign debt strategist Nicholas Spiro. “It is suffering from a toxic mix of economic depression and political stalemate. Investors are deluding themselves if they think the ECB can keep holding the fort.”

President Giorgio Napolitano has picked 10 “wise men” to put together a team, but critics say such efforts to preserve the status quo are doomed to failure. Fresh elections in June look likely, with polls pointing towards an even bigger rejection of eurozone austerity.

It is questionable what Italy achieved with fiscal cuts worth 3pc of GDP in 2012. Recession shattered political consent for reform, while the economic damage caused the debt ratio to rise even faster. Fitch Ratings has lifted its debt forecast sharply to 130pc of GDP this year.

The ECB has stabilised the sovereign debt of the so-called Club Med countries, but cheap credit is not reaching the firms that desperately need it. Goldman Sachs said the North-South spread in funding costs is back to the extreme levels seen in late 2011, with Italian and Spanish firms paying almost twice as much as German rivals to borrow for up to five years. It said the ECB may have to try “direct measures” to target credit at countries starved of funds.

The chorus of dissent over Europe’s fiscal strategy is growing louder. The Dutch Bureau for Economic Policy Analysis (CPB) has accused its own government of “cognitive dissonance” over the self-defeating effects of austerity overkill.

The CPB said fiscal cuts do far more harm in balance sheet recessions when the private sector is slashing costs and the interest rates are near zero.

Germany, meanwhile, has brought forward plans to balance its budget by a year “to set an example”. Leaders of Bavaria’s Social Christians in the ruling coalition want to go further, calling for an inner club of AAA states to fix policy and impose discipline on everybody else.

North and South are scarcely listening to each other anymore.

Meanwhile, someone who has joined the unemployment ranks in Europe is the Cyrpus Finance Mjnister, who has resigned after just five weeks in the job.

Australia’s Royal Commission Into Child Sex Abuse Begins

The Commissioners: (left to right) Mr Bob Atkinson AO APM, Professor Helen Milroy, Justice Peter McClellan AM (Chair), Justice Jennifer Coate, Mr Robert Fitzgerald AM and Mr Andrew Murray.

Stephen: Last November, Australian Prime Minister Julia Gillard announced there would be a Royal Commisssion (our highest level of inquiry here in this country) into the plight of abused children.

Today it began. It’s possibly Australia’s most wide-ranging Royal Commission ever: the Royal Commission into Institutional Responses to Child Sexual Abuse. If the Irish version is anything to go by, then we should see much accountability: in Ireland, among other things, the Catholic Church was obliged to significantly increase its financial contribution to the Irish compensation scheme.

Meanwhile, even on day one, victims of such abuse have been openly weeping in the street outside the County Court in Melbourne, where the inquiry is underway. Yet, despite the claim below, something tells me it will be well completed before it’s current planned end date in 2015.

Abuse Royal Commission Expects 5000 Submissions

By Barney Zwartz, Religion editor, The Age – April 3, 2013

http://www.theage.com.au/national/abuse-royal-commission-expects-5000-submissions-20130403-2h6k7.html

The royal commission into child sex abuse is now open for business. It expects more than 5000 submissions, has already spent more than $22 million, and is unlikely to complete its task by the end of 2015 as requested.

From today, victims can contact the royal commission to register to tell their stories because trained staff are now ready, chairman Justice Peter McClellan announced at the commission’s first public hearing, in Melbourne.

He said the commission had already serviced notice to produce documents on the Catholic Church, its insurer, the Salvation Army and the NSW Director of Public Prosecutions.

It is revolutionary in having six commissioners, and enabling one or more to sit in private to hear victims’ stories, which will be how they spend the next five months.

Justice McClellan said one of the commission’s tasks was to “bear witness” to the abuse and suffering of victims, which it did by making known what happened, including archives for posterity.

“It seems likely that at least 5000 people will want to talk to the commission. The leaders of some groups representing survivors suggest the number could be much higher,” he said.

He said he did not want people under any illusion about the cost of the commission – “it will be expensive”. It has already committed to spending $22 million, and running costs, including holding hearings across Australia would “continue to require the commitment of very significant sums of public money”.

The next stage will involve private meetings with victims, probably carried out in function rooms at hotels and motels around the country to encourage informality and privacy, and Justice McClellan predicted there would be no public hearings before October.

The private sessions do not count as hearings and the information, which is given without an oath, is not evidence, but witnesses can appear again in a formal hearing.

The commission is investigating institutional responses to child sexual abuse, with “institution” broadly defined, he said, including churches, schools, child-care centres, sports and recreational bodies, any state run institution or government department, and non-government organisations that dealt with foster care.

But he said psychiatrists had warned the commission that the accounts they heard would contain serious and shocking allegations and there were limits to how many personal accounts they could safely hear in a day. Therefore they would focus hearings to allow a detailed examination of institutions where there had been problems.

Justice McClellan reminded people that the commission would not decide compensation for victims or convict anyone, although it had established links with police in each state and territory. The police taskforce attached to the Victorian inquiry into child sex abuse has already led to three arrests, with more expected.

On the length of the inquiry, Justice McClellan said a South Australian inquiry into abuse in state institutions heard 800 witnesses and took three years, while Ireland’s Ryan Inquiry took nine years. He said it was unlikely the commission could finish by 31 December 2015, but it would work hard to get as much done as possible by the interim report, due on June 30 next year, so the government could judge the commission’s future course.

He said the commissioners wanted to be as open as possible, though it would be careful when allegations could damage a person or institution’s reputation.

Because an important duty was to recommend changes to laws, policies and practices, the commission has set up a research arm to look at previous reports and possibly do its own research. Senior counsel Gail Furness said the commission had sought details of all current and concluded government inquiries over the past 20 years involving allegations of child sexual abuse in an institutional context – more than 40 of them.

Francis Sullivan, chief executive of the Truth, Healing and Justice Council set up by the Catholic Church to liaise with the commission, said after the hearing that the church had agreed to waive every confidentiality agreement to allow victims to tell their stories freely.