Spanish banks bail out, French parliamentary elections, Unemployment rises in Europe,Canadian unemployment stable but still too elevated.

A lot of information to process. Most of it not good. The best although mixed news comes from France where the first round of the parliamentary elections showed a strong showing by Francois Hollande’s socialist party which garnered about 29.35% of the vote. But the conservative former governing UMP also managed close to the the same share 27.12 % and more disturbing Le Pen’s National front got over 13.6 % of the vote including over 42 % of the vote in her home constituency in the 11th district Henin-Beaumont of Pas de Calais where she finished well ahead of  Jean-Luc Mélenchon the candiate of the radical left who is now eliminated in the second round because he finished a close third behind the PS candidate and Marine Le Pen. Mélenchon’s coalition of the left received 6.9 % of the total national vote. But in Henin-Beaumont he scored 21.5 % as compared to Phillipe Kemel of the socialists who receive 23.5 % of the vote. Le Pen received 42.4 % .

The turnout was down at 57 %. Because the socialist party candidate is not well known there is a real danger he will lose to Le Pen in the second round and she will be elected to Parliament. Nevertheless because nationally the ecologists receive 6.3 % of the vote, other small left parties 3.6% the centrist Mo-Dems 2.3% there is a reasonable chance for François Hollande to win a narrow parliamentary majority in the second round. A total of 26.4 million people voted.

The Spanish banking crisis has received a temporary reprieve with the bailout with European funds of the Spanish banking sector. However, while this is a good thing it does little to address the problem  of the deep recession that Spain finds itself trapped in . Although IMF funds are not directly involved the IMF will be involved in supervising their use. After a brief rally Spanish sovereign bonds fell in price. Unemployment in Spain has hit over 24 % and there is little sign of likely improvement in the coming months without a major stimulus from both monetary and fiscal policy. The Eurozone leaders continue to argue over the degree to which they want to have a real monetary union with a system of backstopping euro denominated debt and a degree of fiscal integration.

The rise in Spanish unemployment was part of the worrying report from Eurostat which shows that the euro zone remains mired in high unemployment on account of its obsession with austerity. The rate rose to 11 % in the euro zone area. It was 21.7 % in Greece, 24.3 % in Spain, 10.2 % in France and Italy,  and 8.1 % in the U.K. The youth unemployment rate for those under 25 rose to 52. 7 % in Greece and 51.5 % in Spain. In Canada the unemployment rate held steady at 7.3 %. This is still too high a rate as unemployment in Ontario was 7.8% and also 7.8 % in Quebec. These are the two most populous provinces and the location of core manufacturing industries. In the light of all that is happening in the global economy and at this rate of unemployment  it would be unwise for the central bank to increase interest rates despite their expressed interest in doing so.


About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
This entry was posted in austerity, Canada, France politics+economy, Québec, Spain, Uncategorized, unemployment. Bookmark the permalink.

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