http://www.spiegel.de/international/eur ... 11,00.html


70% unemployment is just the recipe for revolution. Then when that happens watch every government in Europe either draft new public order laws to stop that happening or a serious change of policy.

its only just started and will get much much worse for that area of Europe with the domino effect taking hold ...

It should reach us some time next year ...........

The good news here is that the number of private sector jobs is growing faster then the number of public ones being lost.

Is it ? WOW that is good news and long may in continue.

The public sector has barely lost any jobs yet, and these were before the announcement of deep cuts. I suspect that private sector employment will stop increase soon enough.

the first part ...



http://www.telegraph.co.uk/finance/econ ... llion.html

the second part ...



http://www.telegraph.co.uk/finance/econ ... years.html

now add in the European 'domino' effect
job creation alone will not work

the urgent need to remove 'working' people from tax credits by having a minimum wage that takes them past the tax credit threshold is required

along with all universal benefits to be means tested

all public sector pensions to be placed on hold until a full, public and accountable, audit is carried out ...

The pension liabilities aspect is a sham. These will be paid for out of future taxes which are not included. The right wing use it as an excuse to slash the welfare system much further, claiming that future tax rises will bankrupt the nation. Completely ignoring the tax cuts that created the mess in the first place.

If interest rates hit 8% in two years then the coalition will collapse. There will be millions of households who will be unable to cope with any interest rate increase. Repossessions will cause the government a lot of problems, bankruptcies will rocket. It is also a mistake. The government can set what ever rate it wants, the Bank of England may be setting interest rates but they are deliberately keeping rates low to kick start the economy, the monetarist way. Unfortunately it creates problems down the line. Secondly no one is borrowing so interest rates are ineffective. They are ignoring the inflation problem and it will take a huge crisis for them to raise interest rates 0.25% let alone 7.75%. Though a collapse of a few countries through sovereign debt crisis will probably be the cause. Greece, Latvia, Lithuania will probably collapse and these could take down the big German and Austrian banks. Panic will definitely ensue and then interest rates will rise.

I do not think that we are going to have another recession before then anyway. Next year most likely. The Americans are falling rapidly into recession again, and much of the recovery has been a restocking exercise after the huge cutback before. Unless there is a genuine increase in demand then that effect will vanish and we will be recession again. If it hits in 2013/2014 then that will be tough for the coalition to overcome. If the economy slumps along the floor for the next few years regardless then the coalition are in trouble. I suspect that they will throw the manifesto out of the window to retain power.