Like an aircraft carrier taking a long time to change directions, we are seeing some real progress by Europe to fix themselves. In Portugal, workers will now contribute 18% of their salary to their "Social Security," up from 11%.
In Italy, companies are now allowed to do the unthinkable -- actually layoff employees when the economy tanks. (It is hard to imagine a company not having the right to reduce employment expenses.) Further, severance pay cannot exceed 18 months.
In France, maximum severance pay has been reduced from 45 days per year of employment to only 33 days. While still very generous, it is a step in the right direction.
Increasing revenue by increased taxes or improving labor productivity by loosening labor regulations are all important steps in the right direction, but don't look for a light at the end of the tunnel yet.
As in the U.S., I'll believe Europe is on the rebound when they finally begin to stop the growth in their entitlements. That is the 800-lb gorilla on two continents.
Congratulations, Europe . . . now, get back to work . . . please!!
In Italy, companies are now allowed to do the unthinkable -- actually layoff employees when the economy tanks. (It is hard to imagine a company not having the right to reduce employment expenses.) Further, severance pay cannot exceed 18 months.
In France, maximum severance pay has been reduced from 45 days per year of employment to only 33 days. While still very generous, it is a step in the right direction.
Increasing revenue by increased taxes or improving labor productivity by loosening labor regulations are all important steps in the right direction, but don't look for a light at the end of the tunnel yet.
As in the U.S., I'll believe Europe is on the rebound when they finally begin to stop the growth in their entitlements. That is the 800-lb gorilla on two continents.
Congratulations, Europe . . . now, get back to work . . . please!!
