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EPA/Massimo Percossi
Same old.
NIENTE

All of the big European economies that were hit by the 2008 crisis are recovering—except for one

By Annalisa Merelli

The old cliché “When America sneezes, the world catches a cold,”  seemed apt when the Great Recession hit the US in 2008. With the exception of China, the world’s biggest economies, and especially the large European ones, all paid the consequences.

In Europe, the crisis hit employment particularly hard. Unemployment rose steeply until 2013, reflecting a dire job market particularly in Europe’s southern and eastern states. Unemployment started rising steeply in 2009.

Almost eight years later, Europe’s biggest countries and economies are recovering. While many have yet to achieve the GDP and employment levels that they were producing before the crisis, the outlook is, though perhaps tepid, positive.

In the countries that became synonymous with the European employment crisis—Greece, Spain, Portugal and Italy—unemployment is still high, but the trend is downward.

Well, except for Italy.

The latest data from the Italian Institute for Statistics (ISTAT) paints a yet another dire picture of the labor market. The general employment rate is 11.7%, while youth unemployment is 39.1%.

That’s an improvement from the last two years; unemployment in 2015 and 2014 reached 11.9% and 12.7%, respectively. But Italy’s unemployment prior to 2008 was already higher than most other big economies, reaching 6.1% in 2007.

The performance is particularly disappointing, coming a few months after the so-called Jobs Act, a series of reforms that the government passed between Dec. 2014 and Sept. 2015. The reforms were aimed to bring big changes to the Italian job market, particularly by making easier to fire employees (link in Italian) during the first three years of employment. Presumably, that would make employers more likely to hire because they would not be penalized as badly when a hiring decision went wrong.

Indeed, the lower unemployment rates of late appear to be due to a reduction of permanent contracts, which analysts consider (link in Italian) a consequence of the reduction of the fiscal cuts offered to full-time employers during the year 2015 (and reduced for 2016; link in Italian). Many also argue that the overall improvement in employment is due to an overall rise in temporary occupations (link in Italian) than in long-term employment.