For workers in Western Europe, economic recovery seems a long way off

By Edward Cody
Washington Post Foreign Service
Tuesday, January 12, 2010

NIMES, FRANCE -- Time and again, Mohamed Chakiyet has been called back to the employment bureau: another form to fill out, another bureaucrat to meet with, another training offer. But in the four months since he has been out of work, Chakiyet has yet to find a company willing to hire him -- or even grant him a job interview.

"I'm waiting," he said after his latest visit, which was no more promising than those that came before it. "But it's a little difficult."

Chakiyet, a lanky 19-year-old with a vocational training diploma, has set out to reach a modest goal: a job driving a delivery truck around this middle-size city 75 miles northwest of Marseille. For the time being, however, he has become a prime example of Western Europe's corrosive unemployment, which according to the Organization for Economic Cooperation and Development (OECD) has risen to an average of almost 10 percent as a result of the global economic crisis and is likely to get worse before it gets better.

As European banks return to profits after huge government bailouts and political leaders forecast a broad if uneven return to growth, economists have warned that it will take longer to see any recovery in the job market. As a result, the greatest human drama associated with the crisis -- families thrown into distress and horizons closed for millions of youths -- seems likely to endure as part of the European landscape for another year and probably more.

"They keep having me come back," Chakiyet explained, "but I have not been able to get a single appointment with an employer. They don't seem to have their hearts in it."

Legislation that provided Western Europeans with a strong safety net and buffered them from the worst effects of the crisis is now likely to inhibit job growth, even if the continent's economies return to growth this year as predicted. The decision to hire a worker involves such a large commitment and layoffs are so expensive, economists say, that businessmen hesitate to make a decision until they are sure a recovery is underway.

"It's the way companies react to the crisis," explained Nicolas Véron, an analyst at the Bruegel research institute in Brussels. "They wait as long as possible before they lay off people, and they are also cautious before rehiring people, because they don't want to have to lay them off again. Hiring and firing costs are high."

In addition, Western European leaders decided on modest stimulus programs, despite pleas from Washington, out of fear of expanding government debt. Chancellor Angela Merkel has been a particularly strong champion of budget discipline in Germany, where the OECD predicted that unemployment will probably rise above 9 percent this year and could hit 9.7 percent by 2011.

Nimes, a city of tree-lined avenues and bubbling fountains with 150,000 inhabitants, has been a pocket of high unemployment since the decline of its shoe and textile industries years ago. Signs of improvement were finally in the air, residents said, until the crisis struck 18 months ago. Since then, the unemployment rate has risen back above 13.5 percent, about three percentage points above the French national rate.

The malaise can be seen in places like the B-Kebab Café in the city's Pissevin neighborhood, where government-subsidized high-rises house poor families and unemployment is estimated at more than 40 percent. Dozens of men, many speaking Arabic, sat around drinking Moroccan tea and playing cards on a recent afternoon, as a rare snowfall covered the streets in white.

Denis Volpilière, president of the Nimes Chamber of Commerce and Industry, said plans for government-organized investment in new train lines and irrigation projects have raised hope for new jobs in the next few years. "But in the meantime," he added, "we have to manage all these people without jobs. How are we going to train these people for the needs of the economy?"

In addition, the region's usually clement weather and rich agriculture, combined with generous welfare payments from Paris, have contributed to what Volpilière called "an irreducible unemployment rate" of people who have stopped looking for a job. In a recent report, the OECD warned that the rise in unemployment in France -- 600,000 additions to the rolls for a total of more than 3 million -- could translate into "long-lasting benefit dependency for a significant proportion of the recipient population."

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