Is the Eurozone crisis showing genuine signs of abatement ?

Thoise taken to following developments in the European economy may well have noted several encouraging signs with regards to recovery.Equity markets have risen, the Euro has strengthened, and there has been a renewed air of stability in response to not only an increase in European manufacturing, crucially passing the benchmark deemed necessary for growth, but positive comments from senior European officials, such as the European Council President, Herman Van Rompuy.

As such, the European economy is ostensibly improving on a macro-economic basis, with the pertinent improvement in manufacturing output not only providing a solid base for growth, but underpinning a much-needed sense of stability.

However, one must not be fooled into thinking that these facts alone constitute any mitigation in the endemic recession that has swept across Europe in the midst of the financial crisis. The first, and perhaps most important indicator of the lack of abatement is the continued high unemployment. Unemployment across the Eurozone as a whole has yet to peak, yet stays at 12 %. In comparison, unemployment rates between 1930-38, in the fallout of "The Great Depression " were 8.8 % in Germany, and 9.8 % in the UK, for example. Furthermore, youth unemployment is incredibly high at 24 %, with highs of near 60 % in Greece and Spain. With an aging population, one must question whether young people, the future drivers of the economy, will have the skills and experience to drive economic growth in the long-term.

In the short-term, these very same people will struggle with regards to entrepreneurship, one of the four factors of production ( Land, Labour, Capital, Entrepreneurship), as credit for small and medium businesses, the life-blood of most economies, remains at best difficult to procure, a problem exaserbated as banks aim to raise capital reserves to safer levels following the crash of 2007-8. As a result, societies will continue to lack jobs, and investment will be slow to recover as both  individuals and corporations remain wary to back the investment that is crucial for long-term, sustainable growth and prosperity.

Even without mentioning the fragile governments of Greece, Italy, Portugal and Spain which continue to threaten the current tranquility, we can see that despite some stabilisation and encouraging blips, the Eurozone economy is not demonstrating any abatement ; Rather, we remain in the midst of the Second Great Depression.