Dramatic economic and financial developments in Europe never seem to quit. In the latest news, several eurozone countries have slipped back into recession, bringing a backlash against austerity policies into full swing. Now, the election of Socialist President Francois Hollande in France may offer a path to more growth-oriented policies, but big questions remain about which ones are economically — and politically — viable. To help clarify the implications for business and investors, Knowledge@Wharton has prepared a special report on the challenges facing Europe, including a look at the critical issue of unemployment. We also consider a key figure in the eye of the storm — Mario Monti — Italy’s prime minister, who also serves as minister of the economy and finance. The report includes insights from experts inside and outside of Wharton, some of whom will participate in the upcoming Wharton Global Alumni Forum in Milan on May 17 and 18.
What Hollande’s Election Means for the Eurozone: In the aftermath of the election of Socialist Francois Hollande as the new president of France, eurozone austerity policies in Europe, which many now blame for pushing much of the Continent back into recession, appear likely to be loosened. At the same time, at least some complementary growth-oriented policies may be introduced. Big questions remain, however: What will these changes look like, and how much difference will they make? (Article with podcast)
Saving Southern Europe’s ‘Lost Generation’ of Jobless Youth: In Spain and Greece, more than 50% of young people between 18 and 24 are out of work. In Italy and Portugal, the number is close to 30%. This represents a social and economic disaster that could have devastating consequences for Southern Europe, rippling outward toward the rest of the continent and the world. Experts at Wharton and elsewhere say outdated labor regulations combined with a slow economy have contributed to the problem. But even if labor laws are restructured, a solution will be hard to work out, all the more so now that many countries in Europe have slipped back into recession.
Mario Monti’s Long March to Get the Italian Economy on Its Feet: Mario Monti, the economist whose government replaced the Berlusconi administration in Italy last December, brings a technocrat’s view to the task of reviving the country’s economy. According to experts from Wharton and elsewhere, this task will be made easier by the fact that the Italian economy is in better shape than that of countries like Greece. Still, Monti faces enormous challenges, and major structural reform will be needed.