Wednesday, June 21, 2006

Timbro on European Unemployment

Timbro is a Swedish free-market think tank that has been warning Europe of the consequences of its economic policies. Johnny Munkhammar, the director of Timbro, argues for less regulation of labor and lower taxes in his column, "The Kids Are Not Alright."
The latest figures from Eurostat (the EU's official statistics agency) on youth unemployment are depressing for Europeans. On average, in the EU in 2005, unemployment for people under the age of 25 was 17 percent. In the US, by comparison, it was 10 percent. In Japan, it was 4 percent.

Within the EU, there are great differences, ranging from Poland's 33 percent all the way down to 5.7 percent in the Netherlands. The levels in Poland and Slovakia lift the average level in the new EU-10 higher than in the old EU-15, though it is fairly low in most new member states.

In the EU-15, the countries with the highest levels -- above 20 percent 00 are Greece, Italy, Sweden, France, Belgium and Finland. Indeed, it is generally acknowledged that France and Italy have serious economic problems. But Sweden and Finland might surprise some. (A new study by McKinsey shows that the real unemployment rate in Sweden is 15 percent -- three times what the government claims.)
One would have hoped that elections in Germany would have jolted Europe's largest economy out of its doldrums. But that election was basically a tie and the proposed solution seems to be higher taxes. When will the elites of Europe realize that they are leading their continent (if Europe qualifies as one) down the wrong path? But more importantly, when will the people of Europe wake up and smell the Hayekian pamphlets?