The European Union isn't blowing apart with quite the same fireworks as a few months ago, but here is your necessary weekly reminder that things are a long way from getting better across the Atlantic.
In Spain and Greece, 25% of workers are still unemployed and more than 50% of young workers are still out of a job. Those numbers aren't falling, or even stabilizing. They're growing by leaps and bounds with each new report out of Europe. Greece's unemployment rate climbed a whopping eight percentage points since July 2011, according to Eurostat, and Spain kept pace, stretching its official unemployment rate to a continent-record 25.8%. Both countries are in a recession and both rates will probably get worse before they get better.
Meanwhile, inflation continues to fall for every major component: food, energy, industrial goods, and services.
There's a saying among companies, especially start-ups, that the metrics you pay most attention to move in the direction you'd like, so, the key is focusing the right metrics. It's the same with central banking, really. For most of this crisis, Europe's central bankers fixated on inflation when the real problem for European countries in the periphery -- e.g.: Greece, Spain, Portugal -- was falling growth and rising unemployment. Rather than risk a dose of inflation to help their competitive, the strongest countries in Europe, led by Germany, administered austerity and watched their neighbors shrink and protest and burn.
In September, the European Central Bank finally announced its plan to save the currency by promising to buy unlimited debt to push down interest rates in troubled countries. They've succeeded, in a way. Ten-year bonds in Portugal and Spain are sliding. Meanwhile, unemployment is rising and growth is contracting. Fixing rates was the easy part. It required a promise. Fixing the real economy is the hard part. It requires real money.