It is always amazing when the EU works out its own folly a decade too late. ECB President Draghi made the conclusion that the EU had a lot of wiggle room on the long term employment front and raising the participation rates in the labour market. The EU has around 12% unemployment but 50% of it is LT.
Draghi complained that the austerity in many countries is forcing monetary policy to bear a too big a load. Once again this seems like a cop out. The austerity comes from the regulation and inflexibility created by the EU which restricts Member States at the root level.
So once again the problems with some of the Southern Member States (Greece, Spain etc) we can see that LT unemployment has surged over the last decade because the EU is forcing austerity on it to make sure it can meet their imposed financial targets. The Greeks are resisting so the pressure on the people gets worse and the relative strength of the euro prevents its economy from being able to ignite the economy
Youth unemployment, the backbone to help offset the ageing population Draghi worries about continues to rise in many parts of the Eurozone.
So once again we have a central bank looking to excuses to make up for the devil’s work of printing a way out of trouble. Don’t forget each euro of GDP requires almost 5 euros to achieve it…the EU project is fast running out of runway