European debt crisis: documenting public deficit policy and possible impacts on employment
Comparison for selected Euro area countries: France, Germany, Greece, Ireland, Italy, Portugal, Spain
General government deficit (-) and surplus (+) in % of GDP
In order to make the dynamics - in this case of public debt - more visible, generate the rates of change (supported by the AD HOC CALCULATOR).
At the beginning of the financial crisis in 2008, it became apparent that Germany, Ireland and Spain in particular had reacted with an extra boost to their budget deficits. France, Italy, Portugal and Greece, on the other hand, kept their deficit more or less constant.
Supplementing the development of the last two years (here quarterly):
Latest general government deficit (-) and surplus (+) - quarterly data in % of GDP
The impact of the crisis was dramatic: with the exception of Germany, the labour markets collapsing, especially in Spain, Greece, Ireland, Portugal and Italy. France was able to stabilise its unemployment rate at 9-10%:
Unemployment rate in % of active population
But we also see the labour markets recovering from 2013 onwards. However, unemployment remains extremely high especially in Spain and Greece (15-20%). On the other hand, Ireland and Portugal managed to successfully leave the vale of tears (<10%).
Latest harmonised unemployment rate in % of active population
But the crisis is still being overcome and the current development does not give hope for a more dynamic improvement:
Total Employment percentage change Q/Q-4
The rising number of unemployed households by 2013 (excluding Germany) could lead to the conclusion that an expansive deficit cannot stop the crisis. But whether the following austerity policies in Greece, Ireland, Portugal and Spain can be attributed to the decline in unemployment remains speculative. France and Spain have also reduced expanding their deficits, but have not been rewarded by a significant fall in their number of jobless households. And then there is the special case of Germany, which even reduces its public debt and keeps the number of jobless households at 8% - despite the crisis.
