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Policymakers have generally taken it as a given that growthproduces jobs, but the relationship is not so simple given thecomplex interplay of business, people and regulations. In its latest Economic Outlook report, the Organisation forEconomic Cooperation and Development forecast that after a 0.1percent contraction this year the eurozone will rebound in 2013with 0.9 percent growth. Yet unemployment is set to rise to 10.8 percent this year and 11.3percent in 2013. The upward drift in eurozone unemployment "hides sharply divergentdevelopments," the OECD said, "with large increases fromalready-high levels in the economies under market pressure, moremoderate increases elsewhere and continuing declines in Germany." Indeed bailed out countries Greece and Portugal as well as Spainand Italy are set to see unemployment rise further as theireconomies keep on contracting. But unemployment will also rise for countries with growth, such asin France, which is forecast to expand by 0.6 percent this year and1.2 percent in 2013 but with the jobless rate also forecast toclimb to 9.8 percent and 10.0 percent. Fellow eurozone members Austria and Luxembourg are also forecast tosee steadily rising unemployment despite their economies continuingto expand. Likewise for Britain, which is outside the euro, as is Sweden,where the jobless rate will hold steady despite the economygrowing. "The historical links between unemployment and growth fit withdifficulty in this crisis," the head of the French state'sEmployment Council, Marie-Claire Carrere-Gee, told AFP. The Employment Council released a report on how employment policiesfared during the global financial crisis in 2008, and found thatfewer jobs were lost in countries such as France and Britain thanwould otherwise have been expected. For such countries "the link between growth and employment, alreadyweaker, was weakened further" noted the report, especially comparedto countries such as Spain and the United States which sawunemployment explode after property bubbles burst. One reason that helped some European countries avoid a massivesurge in unemployment were state programmes to help businessestemporarily reduce working hours, or let people share jobs. "Companies preferred to hold on to their skills base to bepositioned when activity recovered," said Carrere-Gee. But this came with a cost, both to companies and the overalleconomy. For Mathieu Plane, an economist at the French Economic Observatory,the report showed "a loss of competitiveness for businesses whichabsorbed the shock and didn't immediately react by cuttingemployment." The OECD sees less room for labour retention during the eurozonedebt crisis. "In some European economies as in 2008-09, it is possible thatlower working hours might cushion employment, although the scopefor doing so is more limited at present," it said in its latestreport. The OECD said working hours were now close to estimated trendlevels, rather than above them as in 2007-08. Instead, businesses appear to be cutting jobs this time in responseto the slowdown "bringing the unemployment rate back towards alevel that might normally be expected given output developments,"said the OECD. The London-based research firm Markit, which compiles theclosely-watched Purchasing Managers Index (PMI) survey, found thatFrench companies are slashing jobs in response to weakening demand. "Companies adjusted to the deteriorating conditions by cuttingemployment at the sharpest rate for over two years," said MarkitSenior Economist Jack Kennedy after releasing the May figures forFrance. The policy prescription from the OECD and others is much the samethat European countries have received for dealing with the debtcrisis: structural reforms to increase the flexibility andcompetitiveness. "Labour market reforms remain essential to foster near-termemployment growth and reduce the risk that higher unemploymentbecomes permanently entrenched," said the OECD. Such reforms can be politically difficult to implement as they takeon entrenched interests, but Spain, Italy, Portugal and Greece haveall moved along this front although there is an increasing risk ofan electoral backlash before results emerge. "Elections in a number of euro area countries have signalled thatreform fatigue is increasing and tolerance for fiscal adjustmentmay be reaching a limit," OECD chief economist Pier Carlo Padoanwarned this past week. We are high quality suppliers, our products such as China R134a Refrigerant 30 lb , China HC Refrigerant for oversee buyer. To know more, please visits R134a Refrigerant 30 lb.
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