German Finance Minister Puts Focus on Unemployment

LONDON — A failure to tackle high youth unemployment could destroy democratic support for the European Union’s governments, the German finance minister, Wolfgang Schäuble, said Thursday, in an apparent concession that the euro zone’s focus on austerity must be tempered by other policies.

Speaking at an investment conference in London, Mr. Schäuble cited joblessness among young people as Europe’s biggest problem, arguing that the Continent faced the difficult task of “enhancing growth but in a sustainable way.”

“We will have to speed up in fighting youth unemployment, because otherwise we will lose the support, in a democratic way, in some populations of the European Union,” he said.

Mr. Schäuble, seen as one of the hawks among European finance ministers, said he supported recent moves by the European Commission, the bloc’s executive, to give some countries more time to bring down their budget deficits. But he also emphasized the need for more structural reform in Europe.

Across the Continent there are growing signs of austerity fatigue among voters amid worries that a focus on retrenchment is pushing economies into a downward spiral. Last month, José Manuel Barroso, the president of the European Commission, said austerity had hit the limits of public acceptance.

The unemployment rate in Greece reached 27 percent in February, according to figures released on Thursday, and the jobless rate for young people was more than 60 percent. The overall jobless rate is also expected to be 27 percent this year in Spain, where more than half of young people are out of work.

Speaking before a two-day meeting of Group of 7 finance ministers in Britain, Mr. Schäuble argued that progress in stabilizing the euro zone crisis meant that it would no longer be the main obstacle to global growth.

He struck a conciliatory tone over plans, supported by Germany, for a European financial transaction tax. Mr. Schäuble said there was “a long way to go” before any decision on the proposal, which Britain has challenged.

Article source: http://www.nytimes.com/2013/05/10/business/global/german-finance-minister-puts-focus-on-unemployment.html?partner=rss&emc=rss