But it’s Spain that’s suffering the most at the moment. It has the highest unemployment rate in the eurozone: one in four people is now out of work. And today the Spanish people received an added blow: under the terms of the banking bailout, its lenders are being forced to write off preferred shares and subordinated bonds (debt, basically). Unusually, this puts the savings of ordinary people at risk because they were sold on to retail investors as savings products.
And, if the ILO report is anything to go by, the future looks just as bleak. ‘Unless targeted measures are taken to increase real economy investments, the economic crisis will deepen and the employment recovery will never take off,’ said ILO director-general Juan Somavia. And it’s not just the eurozone at risk any more: ‘the entire global economy is at risk of contagion,’ is the ILO’s damning conclusion.
Unless there is a concerted shift away from austerity towards a real investment in job creation, the ILO concludes, millions more will be laid off. Businesses that are grimly hanging onto staff in the hope of an imminent upturn will have to let them go.