Is this Europe’s scariest chart?

Zero Hedge says it is:

(Source: Zero Hedge)

And it does look terrifying. Spain’s youth unemployment rate is 51.4 percent! Greece’s is nearly there. Isn’t that the sort of that leads to war and destruction? Perhaps, though there’s a key caveat missing here: Spain’s youth unemployment rate is only calculated among those youths actually looking for work. As the European Commission explains, the vast majority of kids that age are still in school. That means only about 17.8 percent of all Spanish youths aged 16-24 are jobless and not in school. (In Greece, it’s 10 percent of all youths; across the euro area as a whole, it’s 8.7 percent.) Those are still terrible numbers, albeit somewhat less apocalyptic.

Even so, there’s no question that overall unemployment in Spain is at ludicrous levels — nearing 20 percent — and is much worse than the rest of Europe (France’s overall unemployment, for instance, is only 10 percent). A team of economists at the Centre for Economic Policy Research recently looked into this question and boiled it down to two factors. Construction in Spain was a whopping 13 percent of employment during the housing bubble — far bigger than even the United States — which led to an especially big crash. Also, it’s much harder to fire workers in Spain (which in turn makes jittery employers more reluctant to hire in the first place) and much easier to use temp workers.

Coupled with the slow growth across Europe, those laws have caused unemployment in Spain to skyrocket. In fact, the CEPR researchers estimated, if Spain merely adopted France’s marginally more lax labor restrictions, unemployment would drop 3.4 percentage points over the medium term. It’s another reason why organizations like the IMF have been promoting labor-market reforms as one answer to Europe’s debt woes.