Euro-zone Unemployment Crisis Driving Workers to Migrate to UK
Economics / Unemployment May 31, 2013 - 11:10 PM GMTBy: Nadeem_Walayat
Euro-zone unemployment rates hit new economic depression extremes, with Greece leading the PIIGS nations that collectively have a youth unemployment rate of more than 50% that continues to encourage mass migration out of the PIIGS to either Germany, or the UK as the below table illustrates there exists a huge gap between the single markets jobs markets.
| Country | 18-25 | All |
|---|---|---|
| UK | 20.2% |
7.7% |
| Germany | 7.6% |
6.9% |
| Greece | 62.5% |
27% |
| Spain | 56.4% |
26.8% |
| Portugal | 43% |
17.8% |
| Italy | 40.5% |
19% |
| Ireland | 26.6% |
13.5% |
Many of the smaller PIIGS countries unemployment rates would be even higher were it not for the fact that hundreds of thousands of unemployed have been migrating to other european union countries such as Germany and the UK over the past 4-5 years, with Ireland alone witnessing a staggering 308,000 workers leave, without which Irelands unemployment rate would be DOUBLE at well over 25%!
The effect of the soaring unemployment rates is to blame immigrants for the jobs crisis as we see in the highest unemployment nations such a Greece and Spain that are seeing increasing levels of violence against ethnic minority populations.
It is also ironic that countries with the greatest increase in persecution of immigrant populations, namely Greece are witnessing the highest level of emigration of especially their young people to Germany and the UK, where I am sure the newly arrived migrants expect to be treated in a far more civilised and equal manner than that which they subject their own immigrant populations to, the same holds true for virtually all eastern european states that whilst migrating to the west in huge numbers, domestically drift towards far right extremism.
The net effect is that Britain's Labour market is far stronger than that which the official figures suggest as the UK soaks up at least a net 100,000 euro-zone migrant workers each year which one the hand should support tax revenues but on the other hand results in persistently high unemployment due to a highly competitive UK jobs market that also acts to cap wage rises, which is good for the british economy because it increases competitiveness.
The bottom line behind the euro-zones unemployment crisis is apparent in the data itself, in that the PIIGS just cannot compete against Germany which has effectively EXPORTED its unemployment abroad. Therefore the only solution remains as I have iterated for several years now which is for either Germany to leave the eurozone or the PIIGS to leave and inflate their way out of their current economic depression death spiral.
In terms of financial market opportunities, they are clearly to be found by investing in German corporations and real estate for the alternative to breakup of the euro-zone is for Germany to turn itself from a large exporter to a net importer, i.e. for Germans to go on a record breaking spending spree, creating demand for euro-zone wide goods and services, though given the inflationary consequences I don't see there being political will in Germany to go down this path unless forced to right at the brink of a euro-zone breakup.
Nadeem Walayat
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Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of four ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series.that can be downloaded for Free.
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