To say the last decade has been difficult for Europe’s southern states would be an understatement. The global financial crisis and the great recession triggered a subsequent crisis in the Eurozone.
The countries sometimes described unflattering as the Pigs – Portugal, Italy, Greece and Spain – were particularly badly affected, struggling to pay off government debts or to bail out over-indebted banks. Ireland was once included in this category, then the Piigs, but it is no longer regarded as being so.
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Emergency bail-outs just about prevented these countries going under but left them with a brutal troika of interest payments to the European Commission, International Monetary Fund and European Central Bank.
Austerity measures, on which bailouts were conditional, crippled the economies of Europe’s southern states. Unemployment rocketed, spending dried up and investors fled.
Now, ten years after the global banking system started to crumble, and more than five years after the peak of the Eurozone debt crisis, how are Europe’s southern states faring?
The Eurozone debt crisis forced companies to cut costs and restructure, in order to survive.
Where the recession bit hardest so too did unemployment and Greece, Spain and Portugal all reported record numbers of people without work. At its highest point, in 2013, unemployment in Greece was at extraordinary 27.5%. Spain reached a similar level, with 26% of the active population unemployed while Portugal reached 16.4%.
For all three countries, 2013 represented a turning point, and the level of unemployment has been decreasing steadily. However, at 21.5% and 17.2%, Greece and Spain still have the highest unemployment rates across the whole of Europe. Portugal, more hopefully, has dropped to 9% unemployment.
While this is more than double the unemployment of the UK and US (4.3% and 4.1% respectively), it signals a return to the levels of unemployment seen in Portugal in 2007, prior to the global financial crash.
Italy has a slightly different story.
While unemployment has stayed at lower levels than its neighbours, it has not exhibited the same marked decline since 2013.
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As of 2017, the percentage of people who can’t find work is around 11.6%. Italy remains in significant financial difficulties, as well as political turmoil, and the state was forced to bail out two of its largest banks last year at a cost of more than €5 billion.
Employment in Europe’s southern states has improved, but the benefits are not felt by everyone equally.
In Greece, unemployment among women (shown by the dotted lines in the chart above), peaked at over 31% and now sits at 26%. Men’s unemployment was 17.8% at the end of 2017, meaning that the disparity between male and female employment levels in Greece is the greatest it has been in the last decade.
In both Spain and Italy, female unemployment is consistently higher than male. Only in Portugal are the two rates equivalent, having reached parity in 2016.
In all four countries, unemployment is worst among the youth. In 2013, unemployment among the 15-24 age bracket reached a staggering 58.3% and 55.5% in Greece and Spain respectively.
Despite decreasing, these numbers remain very high – 43.6% in Greece, 38.6% in Spain, 34.7% in Italy and 23.9% in Portugal. None of the four countries have seen youth unemployment return to the levels seen before the financial crisis.
In general, increasing employment has been accompanied by an expanding economy for Portugal, Italy and Spain. All three have seen their GDP increase slowly but steadily since 2013.
The exception, however, is Greece, whose GDP per capita in 2016 and 2017 was the lowest it has been. In Greece at least, the economic tragedy rumbles on.
While the outlook is generally more positive than it has been in the last decade, Spain, Greece, Italy and Portugal still have a ways to go in their economic recovery.
Three of them still hold government dept that is greater than their GDP, with Greece at 178.6%, Italy at 131.8% and Portugal at 125.7%. Spain only just slips under, with gross government dept at 98.3% in 2017, which, while stable, remains at the highest level it has held since 2008.