Global economic crisis: EU’s jobless rate hits new high of 11.6%

November 1, 2012 – LONDON — Unemployment in the 17-country eurozone hit a record high of 11.6 per cent in September, official figures showed Wednesday, a sign the economy is deteriorating, as governments struggle to get a grip on their three-year debt crisis. The rate reported by Eurostat, the EU’s statistics office, was up from an upwardly revised 11.5 per cent in August. In total, 18.49 million people were out of work in the eurozone in September, up 146,000 from the previous month, the biggest increase in three months. While the eurozone’s unemployment rate has been rising steadily for the past year as the economy struggled with a financial crisis and government spending cuts, the United States has seen its equivalent rate fall to 7.8 per cent. The latest U.S. figures are due this Friday. With the eurozone economy fading, most economists think unemployment will keep increasing over the coming months and that the deteriorating economic picture will soon spook investors again after a brief hiatus. “Financial markets have calmed somewhat, but we expect that the deteriorating economy will soon enough lead to more crisis headlines,” said Tim Ohlenburg, senior economist at the Center for Economics and Business Research in London. Five countries in the eurozone are already in recession — Greece, Spain, Italy, Portugal and Cyprus — and others are expected to join them soon. The region as a whole is expected to be confirmed to be in recession when the first estimate of eurozone economic activity in the third quarter is published mid-November — a recession is officially confirmed after two consecutive quarters of negative growth. “With surveys suggesting that firms are becoming more reluctant to hire, the eurozone unemployment rate looks set to rise further, placing more pressure on struggling households,” said Ben May, European economist at Capital Economics in London. Recession and unemployment make it more difficult for the eurozone to deal with its debt problem — governments need to pay more benefits to the jobless and receive less tax revenue. That could push countries to take even more austerity measures, which in turn weighs on economic activity. Once again, Spain held the ignominious position of having the highest unemployment rate in the eurozone, at 25.8 per cent. Greece may yet surpass that — its unemployment rate mushroomed to 25.1 per cent in July, the latest available figure, and is due to increase in the face of what many economists are calling an economic depression. The country is forecast to enter its sixth year of recession next year. Both countries, which are at the heart of Europe’s three-year debt crisis, have youth unemployment above 50 per cent. That risks creating a lost generation of workers and is straining the countries’ social fabric. Extremist political groups in Greece and regional separatist parties in Spain have grown in popularity as the economy worsened. Concern over the social impact of unemployment has also weakened governments and hobbled political decision-making. In Greece, the three parties in the coalition government have tried for months to agree on an austerity package that is necessary for the release of bailout loans to prevent the country’s bankruptcy. –Herald News

November 1, 2012 – GAZA - For the best part of the past 16 months, the Palestinian Authority failed to pay on time the wages of more than its 200,000 public-sector employees. The delays in salary payments are caused by delays in the transfer [to the Palestinian Authority] of emergency aid funds and Palestinian tax revenues collected by Israel on behalf of the Palestinian Authority. The economic implications of the situation are far-reaching and disastrous, argues economist Yitzhak Gal in a report prepared by him for the monthly e-newsletter Iqtisadi (September issue, published by the Tel Aviv University Moshe Dayan Center for Middle Eastern and African Studies under the heading “The Palestinian Economic Crisis: A Loud Wake-Up Call.” The situation is liable to have dangerous [social and political] consequences due to the fact that the Palestinian public-sector employees, including the security establishment personnel, account for [well] over a quarter of the Palestinian purchasing power. Their low salaries are a mainstay of economic and social stability in the West Bank. “As these salaries have not been paid on time and in full,” the report explains, “the economic security of the public-sector employees is undermined “and the shock waves spread to the West Bank society at large.” Furthermore, [many of] these public-sector employees are unable to meet bank loan repayments and the devastating effect is felt throughout the financial system. Wage levels in the Palestinian territories are evaluated with reference to the purchasing power and standard of living of the local inhabitants. The close ties with the Israeli market are reflected in similar price levels in the West Bank and Israel, in particular when it comes to the price levels of fuel, communication services and a whole array of basic food products. [Since wages in the Palestinian territories are much lower than in Israel,] the real purchasing power of Palestinian households is much lower than that recorded in Israel. Comparisons of related international data conducted by Gal show that the Palestinian GDP [gross domestic product] per capita [when adjusted to local purchasing power] is far lower than that of neighboring Arab counties, and is only slightly higher than that of the poorest countries in the region. In other words, the Palestinians’ standard of living and poverty level are similar to those found in countries like Sudan or Yemen. –Al Monitor

Israel is at War, Whether Netanyahu Admits it or Not
Israel's Benjamin Netanyahu claims that during the last four years, Israel has not been fighting a war. Yaron London writes that the prime minister can't avoid that distinction simply by narrowly defining the term and refusing to establish clear borders between Israel and the outside world.

Read more: http://www.al-monitor.com/pulse/security/01/03/this-too-is-war.html#ixzz2Azma4RK4