Magazine article European Social Policy

World of Work : Austerity and Deregulation Exacerbate Jobs Crisis, Ilo Warns

Magazine article European Social Policy

World of Work : Austerity and Deregulation Exacerbate Jobs Crisis, Ilo Warns

Article excerpt

The trap of austerity is snapping shut on Europe, warns the World of work report 2012: Better jobs for a better economy', published on 30 April by the International Labour Organisation (ILO). The report voices concerns over the combination of fiscal austerity and tough labour market reforms being implemented so far by governments and calls for an alternative approach that will encourage job creation. "The narrow focus of many eurozone countries on fiscal austerity is deepening the jobs crisis and could even lead to another recession in Europe," declared Raymond Torres, director of the ILO Institute for International Labour Studies and lead author of the report. "Countries that have chosen job-centred macroeconomic policies have achieved better economic and social outcomes. [ ] We can look carefully at the experience of those countries and draw lessons," he concluded on the eve of International Labour Day (1 May).

The existing jobs deficit stands at 50 million and more than 80 million individuals are expected to enter the labour market over the next two years. According to the ILO, a more job-friendly approach to budget discipline could create 1.8 to 2.1 million jobs within a year in the advanced economies.

EUROPE SINGLED OUT

The 2012 report singles out the EU27 "where the unemployment rate increased in nearly two thirds of these countries since 2010". Most governments have opted for austerity and deregulation to calm financial markets. The report notes, however, that this approach has resulted in weaker economic growth, increased volatility and a worsening of banks' balance sheets leading to a further contraction of credit, lower investment and consequently more job losses. Deregulation policies - particularly in Estonia, France, Greece, Hungary, Italy, Lithuania, Latvia, Romania, Slovakia and Spain - will fail to boost growth and employment in the short term, notes the ILO. …

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