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European Recovery Means Little for Jobless Generation

Photographer: Simon Dawson/Bloomberg

Jobseekers speak to job advisers at the service counters inside a Pole Emploi, the French national employment center, in Strasbourg, France. Close

Jobseekers speak to job advisers at the service counters inside a Pole Emploi, the... Read More

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Photographer: Simon Dawson/Bloomberg

Jobseekers speak to job advisers at the service counters inside a Pole Emploi, the French national employment center, in Strasbourg, France.

Francisco Justicia Carrasco has been sending off 50 resumes every Monday for more than three years. He doesn’t expect a job for a long time to come yet.

“The situation is screwed up,” said the 28-year-old who lives in Ripollet, close to Barcelona, and has worked in a range of jobs from shop cashier to packaging over the past decade. “I don’t see any improvement at all from last year or even the year before.”

Carrasco is one of the legion of unemployed across Europe’s southern periphery who are seeing little benefit from an economic recovery that pulled the euro region out of its longest-ever recession in the second quarter. More than a third of the bloc’s jobless are in Greece and Spain. In Greece, 64.9 percent of those aged between 15 and 24 are without work.

“The European recovery needs to be significantly stronger before it starts to reduce unemployment,” said Michael Saunders, chief western European economist at Citigroup Inc. in London. “Unemployment is going to be stuck at extraordinarily high levels.”

Europe’s statistics office said yesterday that the euro region’s economy expanded 0.3 percent in the second quarter, ending a recession that started during the depths of the debt crisis at the end of 2011. The European Central Bank in June forecast a contraction of 0.6 percent this year before growth of 1.1 percent in 2014.

While yesterday’s news was hailed by politicians from Paris to Berlin as a sign that the economy is stabilizing, it was little encouragement for Vasia Athanasopoulou, 19, a Greek student scrambling to find work to support her mother.

Without Options

“I feel that there’s nothing for me,” said Athanasopoulou, whose mother is currently the family’s only breadwinner after separating from her husband. “To work as a waitress isn’t something that suits me I think, but I don’t have any other choice.”

Athanasopoulou, who is studying international relations, is up against queues of people who line up for waitressing and other low-paid jobs.

“In Greece, the truth is I don’t see a future, at least for the next few years,” she said.

Some economists point to falling labor costs across southern Europe as a sign the region may be becoming more attractive as a manufacturing base. In Portugal, PSA Peugeot Citroen (UG) is increasing production. Ford Motor Co. said last month it plans to start producing new models at its Almussafes plant near Valencia, eastern Spain, next year.

In Spain, the average annual cost per worker dropped last year for the first time since the beginning of the nation’s economic slump in 2008, falling to 30,906 euros ($41,000) from 31,171 euros in 2011, data released by the National Statistics Institute on July 29 showed.

Labor Costs

High labor costs “had been one of Spain’s weak point before the crisis, and is now being improved significantly, leading to stronger competitiveness,” Pierre Lapointe, the Montreal-based head of global strategy and research at Pavilion Global Markets Ltd., said in a note this week.

At the same time, the euro-area economy is still falling short of the 1.5 percent growth rate it needs to bring down unemployment, said David Owen, chief European financial economist at Jefferies International Ltd. in London.

“The risk is unemployment stays around these record levels,” said Owen. The European Commission expects the jobless rate, currently at 12.1 percent, to stay at that level next year.

The challenge for Athanasopoulou and others like her is that the squeeze on their incomes is making it harder for them to get the skills needed to thrive when growth returns. While she wants to learn German, education isn’t cheap.

Helping Out

“I look at my mother, she doesn’t say anything but it’s a lot of money,” she said. “My family isn’t particularly comfortable, financially speaking.”

Others blame their fellow citizens for not being brave enough to embrace the change needed to shake up their economies and make it easier to get a job.

“Like many others of my generation, I will always struggle to work and live in Italy,” said Gerardo di Biase, 35, who recently lost his part-time job at a television station and has never had full-time employment. “Across the board there is an excess of nepotism, this idea that you can progress in your career only through an excess of nepotism.”

Back in Spain, Justicia has moved back in with his parents and is not holding his breath for a recovery to improve his situation.

“It’ll be at least two or three years before we see anything real,” he said. “Our lot is to keep at it in the meantime -- looking and looking.”

To contact the reporters on this story: Angeline Benoit in Madrid at abenoit4@bloomberg.net; Maria Petrakis in Athens at mpetrakis@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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