European Restructuring Monitor Quarterly - 2011, Issue 3
The economic situation continued to be dominated by sovereign debt problems in the eurozone countries. As these continued to remain unresolved, general sentiment had turned negative amid fears of a new second phase of the Great Recession of 2008–9.
Growth outlooks in the developed economies had recently been scaled back with below trend growth forecast for 2011–12. Austerity programmes, which had begun to negatively impact public employment, especially in local and central government administrations, had not thus far been accompanied by the hoped-for handover from public to private demand.
Within the EU, there were a number of different labour market stories reflecting very different trajectories during and after the 2008–9 crisis. Unemployment in Spain and Ireland continued to rise while other countries severely affected by the crisis – notably the Baltic states – showed signs of a strong recovery. The German unemployment rate was at its lowest level in nearly twenty years (6%) despite a recent easing of growth while the UK unemployment rates were at an eighteen-year high (8.1%). Meanwhile in Greece unemployment had risen by 4 percentage points in the last twelve months.