Labour Crisis

A prolonged labour market recession is in the making as long-term unemployment is on the rise and many workers are becoming excluded from the labour market. The shift to austerity measures has further deteriorated labour market conditions in countries hit by the debt crisis. The depressed employment situation has been accompanied by growing job precariousness for those who have a job. The incidence of part-time work has risen significantly as has that of temporary employment.

Given the significant slowdown in economic growth, job loss can increase severely as businesses tend to decrease expenditure, leading to higher unemployment. At the same time, the crisis has resulted in the contraction of bank credit for small and medium-sized businesses and this, in turn, has reduced the growth in self-employment.

Measures that will increase employment and speed up economic growth should be taken promptly. Given the impossibility of financing expenditures with deficits, one can realistically suggest budget-neutral increases in training programmes and subsidies to businesses. This must be coupled with government programmes to facilitate credit to small- and medium- sized businesses, financed with increases in taxes in other areas such as environmental or tourist taxes that will not distort the economy adversely.

Adapted from europa.eu

Which one of the following is NOT given as a cause of the labour market recession?