Whatever the U.S. unemployment figures turn out to be on Friday, they will be far better than what the eurozone—the 17 countries that use the euro currency—released today. The eurozone economy is contracting, which is to say it’s in recession, and the overall unemployment is a dismal 12 percent, up from 11.9 percent last month.
But the spread among the 17 countries is far, far wider than among the 50 American states. Unemployment is a mere 4.8 percent in Austria and 5.4 percent in neighboring, but far larger Germany. Both figures are much better than U.S. unemployment, which is at 7.7 percent. Germany and Austria are adding jobs, not shedding them like the rest of the zone. That includes jobs in manufacturing, an economic sector that is bleeding jobs elsewhere. The purchasing manager activity index, a measure of manufacturing strength, dropped sharply last month to 46.8 from 47.9 the month before. Anything less than 50 is an indication of economic contraction.
At City Journal, the invaluable Theodore Dalrymple reviews the equally invaluable Dan Hannan’s A Doomed Marriage: Britain and Europe, and predicts pessimistically that it will change few minds about the EU, since “in the Eurocrats’ world, ignoring arguments is the highest form of refutation.” By way of explaining why the EU has a stranglehold on elite opinion, Dalrymple argues that the EU is good at corrupting business with the promise of controlled markets, politicians with perks far beyond their merits, and civil society with bribes.
All that is true, but not true enough. In Britain, the EU appeals to the elite in part because of the myth of leadership, i.e. the belief that, if only it rolls up its sleeves, Britain will be able to lead the EU in a direction that suits its desires. This is the myth that lies behind the so-called lost opportunity of Britain’s failure to sign the original Treaty of Rome, and it has inspired politicians as diverse as Harold Macmillan and Tony Blair to toss their chips in with Brussels. In reality, the reason why Britain did not sign on was because its interests and ideals led it to prefer different arrangements, and the past 50 years have proven comprehensively that the EU imposes far more on Britain than Britain is able to impose on the EU. Yet the myth lingers.
The dominoes continue to fall. The deepening of the Eurozone economic crisis claimed the sitting governments of Greece and then of Italy, and the biggest domino yet–French President Nicolas Sarkozy–trailed French socialist Francois Hollande after the first round of voting during the weekend. As the French political class began preparing this morning for the upcoming runoff between Hollande and Sarkozy, they were greeted with the expected news of the collapse of the Dutch government.
This latest is the most significant for France, if only because the Netherlands was generally supportive of the austerity-first budget strategy promoted by Germany and backed by Sarkozy. But the political currents began pulling the French president as well, who was sufficiently spooked by the events of the past week, as the Wall Street Journal reports:
Following the weekend political developments in France and the Netherlands, the German-inspired fiscal pact, agreed by Eurozone leaders in Brussels in December, could also be delayed or thrown into question.
In a U-turn from his earlier stance, Mr. Sarkozy has used recent campaign rallies to call for changing the course of Eurozone policies to ensure they are also designed to stimulate growth.