"The immediate threat of banking and fiscal meltdown in the southern periphery has receded, and after one of the longest recessions on record – six successive quarters of economic contraction – there are even tentative signs of recovery."[But] unemployment, already at intolerable levels in some Euro-zone countries, is still rising and money growth remains exceptionally depressed."Nor is there any end in sight to credit destruction, with deeply negative implications for SMEs and future jobs creation. According to a new report by Royal Bank of Scotland, Europe's banks need to shed a further €3.2 trillion of assets (roughly equal to annual German GDP) to comply with new international capital standards."IMF research cited last week by the European Central Bank puts the Euro zone's "structural unemployment" rate – that is the unemployment that won't go away even after the economy returns to normal – at a staggering 10.1%, up from 7.4% before the crisis. If correct, it means that any European recovery will be a largely jobless one."
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Bill Bonner is founder and owner of Agora Inc., one of America's largest consumer newsletter publishers. Best-selling author and globe-trotting correspondent since 1999 for the Daily Reckoning email, he is chairman of family-wealth advisory Bonner & Partners, and co-author with his son Will of Family Fortunes: How to Build Family Wealth and Hold Onto It for 100 Years (Wiley, 2012).
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