Friday, May 4, 2012

A pact for growth is vital for Europe

Financial Times
Editorial
May 4, 2012


As voters go to the polls this weekend in Greece and France, the cradle of western democracy and the grave of its ancien regime are once again at centre stage in Europe. The French election, in particular, could change the constellation of political forces on the continent, giving fresh impetus to the recent groundswell in favour of more growth-oriented policies.

The past week has exposed the limits of pan-European austerity. Survey data showed that the eurozone’s manufacturing sector entered its ninth successive month of contraction. Unemployment reached 10.9 per cent, the highest level since the launch of the common currency in 1999.

If the eurozone as a whole is struggling, the situation in the periphery is even more parlous. Italy’s purchasing managers’ indices for both manufacturing and services deteriorated sharply. Meanwhile, unemployment in Spain touched 24.1 per cent. With more than half of those under 25 without a job, longstanding fears of a lost generation are real.

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