By John Richardson
IT isn’t working. Surely, Europe’s policymakers must realise this?
The trouble is that I worry they still don’t get it, otherwise there would not be plans to print more money in Europe. Resorting to extra quantitative easing isn’t going to rescue Europe’s “lost generation”. More of the wrong kind of European economic stimulus is instead likely to contribute to a new global financial crisis.
Here are some heart breaking facts about this lost generation:
- Five and a half million people young people are out of work in Europe. This is roughly equivalent to the population of Denmark.
- With over 50% of youth unemployed in both Spain and Greece, 41% in Italy, and 36% in Portugal, many young southern Europeans, especially well-educated ones, are left with a tough choice: Facing a jobless future at home, or leaving everything behind to find work abroad.
- “I don’t have any plans. I have seen how little it means to have a plan for life,” says one unemployed young person.
- And another ominously warns: “Unfortunately, I think change will come the uneasy way and I am afraid that a generation, our generation, will be sacrificed for it.” In a policy vacuum when mainstream politicians do not have the answers, history teaches us that people turn to extreme political parties. This is what is happening in Europe today.
Europe, in effect, needs a new “Marshall Plan”. The Marshall Plan rebuilt Europe’s economy after the Second World War.
Comparing Europe today to the devastation left behind by World War II might well seem like a gross exaggeration, as it bombs and not demographics that kill people and flatten buildings.
But over the long term, demographics are a huge challenge for Europe. Without a shared economic vision on how to deal with the challenges of ageing populations and immigration, the region’s economy can only decline.
This ongoing stagnation explains the chart above. Ethylene consumption in Europe was far lower in 2013 than it was in 2000.
The good news is that Europe’s chemicals industry has a fantastic opportunity to be part of the solution. This is a subject that I shall return to in more depth over the coming days and weeks.