Spending cuts will delay jobs recovery says ILO

It will take five more years for the job market in many countries to return to pre-recession levels, according to the International Labour Organisation.

The UN body says there are 23 million fewer jobs now than there were at the start of 2008.

It has warned that the spending cuts which have replaced stimulus measures in several countries will delay a full recovery in the job market until 2015.

The ILO studied the employment data of 69 developed and developing nations.

Deep Cuts

In its annual World of Work Report, the agency said that despite “significant gains” with economic growth, “new clouds have emerged on the employment horizon and the prospects have worsened significantly in many countries”.

Several European nations are implementing cuts in public spending in an attempt to rein in their budget deficits, which have risen because of falling tax revenues, stimulus spending and bank bailouts.

“Those policies that helped countries avoid the worst of the crisis are now withdrawn, and countries have applied very deep cuts in spending,” report author Raymond Torres told the BBC World Service.

“That, of course, is having an impact on jobs”.

‘Risks of demoralisation’

Around 40% of jobseekers have been without work for more than one year, the report says, running “significant risks of demoralization, loss of self-esteem and mental health problems”.

The ILO has recommended “active labour market policies”, such as focusing on vulnerable groups, particularly the young. It also suggests countries make better use of savings to spur productivity and job creation.

The report also notes that 25 countries have so far experienced social unrest since the financial crisis, including emerging economies.

The ILO predicts that global unemployment will be 6.5% this year, a slight fall from 6.6% in 2009.

Source: http://www.bbc.co.uk/news/business-11454455

Greek economy shrinks a further 1.5%

Greek have undergone a very down-turning year… economic recession, shrinking economy, debts and rescuing.

An article from BBC News.

The Greek economy shrank by a further 1.5% in the second quarter of the year, Greece’s statistics agency has said.

That adds to 0.8% decline in GDP recorded for the first three months of the year, suggesting that the decline in the economy is speeding up.

Greece’s GDP has fallen 3.5% since this time last year.

The country has been forced to bring in severe public spending cuts since it sparked a Europe-wide debt crisis earlier this year.

Greece’s statistics agency Elstat said the “significant reduction” in public spending had contributed to the deepening of the country’s recession.

Economists said they were not surprised by figures, and blamed the “uncertainty” surrounding the government’s austerity measures for the falls in GDP.

“Economic activity seems to be declining at an accelerated pace due to high uncertainty and the gradual implementation of austerity measures,” observed Nikos Magginas, senior economist at the National Bank of Greece.

The total decline in GDP during 2010 is forecast to hit 4%, according to the European Union and the International Monetary Fund.

A raft of austerity measures has been announced by Greece since December last year.

They include a pay freeze for public sector workers and reform to the tax and pensions systems.

(http://www.bbc.co.uk/news/business-10951857)