WORLD More than a few continental Europeans will have given thanks in the past year for rigid, sclerotic labour markets doped up with government subsidies. Unemployment numbers on Friday, while undoubtedly grim, will show eurozone joblessness has risen far less during the global crisis than in the US.
State-sponsored short-time working schemes – in which people work fewer hours while the government tops up their pay – plus employment protection laws and cultural factors mean that some of the largest European economies have curbed the social costs of the severe recession. And by shoring up domestic demand they have arguably helped their own economies recover as well as contribute to global stabilisation. In so doing, they have also raised the question of whether systems that provide a generous cushion at times of crisis and preserve productive capacity, which had come to be seen as sluggish and inefficient, are really so bad.
