Four million jobs disappeared in the Eurozone between 2008 and 2011, “employment fell further in the first half of 2012 and unemployment continued to rise“. Last July, the jobless rate reached 11,3%, 4 points more than in the first quarter of 2008.
To sound the alarm is the European Central Bank, which in its latest monthly bulletin dedicates a specific analysis to the labor market in the currency area. Euroland has had to pay “a heavy tribute to the economic and financial crisis” and this scenario does not seem to offer any prospects for improvement in the short term: “The survey data - write the ECB experts - do not signal improvements for the foreseeable future".
To increase the competitiveness of the Eurozone countries most affected by the crisis, it is necessary "incisive reforms of the labor and goods and services markets“. For the ECB, "structural reforms are just as essential as the consolidation of public finances and measures aimed at improving the functioning of the financial sector".
INFLATION, ONLY TEMPORARY INCREASE
As for inflation, last month it increased to 2,7% due to the rise in energy prices and the impact of indirect taxes. However, the trend should not be transmitted to other variables of the economy – they argue from Frankfurt -, therefore the prospects for price stability in the medium term, the ECB's statutory objective, do not change.
Over the policy-relevant horizon, with moderate growth in the euro area and well-anchored long-term inflation expectations, underlying price pressures should remain subdued. Current inflation levels should therefore be transitory and not produce second-round effects”.
UNIFIED BANKING SUPERVISION: 5 PRINCIPLES TO BE RESPECTED
Finally, on the subject of banking supervision, the ECB appreciates the EU Commission's proposal to assign it the responsibility of centralized control over the institutions of the Eurozone. “Since the Commission's proposal foresees ambitious deadlines for the transition to the single supervisory mechanism (starting from 1 January 2013, ed), the ECB has started the preparatory work so as to be able to implement the provisions of the Council regulation since its entry in force".
In particular, Francofore will draw up a legal opinion based on five principles: “A clear and rigorous separation between the decision-making function in matters of supervision and monetary policy; the presence of adequate channels that ensure accountability for one's work; the decentralization of tasks within the Eurosystem; an effective supervisory framework that allows for consistent oversight of the euro area banking system; total compatibility with the reference framework of the single market, which includes the role and prerogatives of the European Banking Authority”.
