The Baltic economies and Ireland are the poster children of the radical structural reformers, who seized the big fat opportunity of the Great European Crisis to dumb down labour, dismantle the welfare state and prioritize financial interests. Their argument: problems caused by a financial crisis, highly leveraged households and the largest building booms and busts ever have to be solved by cutting wages, pensions, welfare, unemployment benefits and government expenditure and to re-regulate the economy to enhance job and financial insecurity of households.

Did it work? Nope (graph 1).

After a bust which, in a post WW II European perspective can only be compared to the post-communist crisis, employment did recover a little in the Baltics (Estonia, Lithuania, Latvia which together have about 7 million inhabitants) and even less in Ireland (4 million inhabitants). But in the EU fringe economies it is still way below historical levels, especially in Spain (40 million inhabitants). Mind that during last year this recovery is stalling in Ireland as well as in the Baltics. Poland, which never knew a financial bubble and devaluated post 2008, did to the contrary see quite some job creation during the last year (+1,7%, which is good). Post 2008, the Spanish non-construction economy did quite well, considering the epic size of the construction bust. But it will take decades to recover. As these countries have been and are (Spain!) experiencing massive out-migration while birth rates have been very low for decades, the development of employment rates (the % of people between 20 and 64 which have a job or another kind of income from work) is less dismal (graph 2).

In Latvia, employment in 2014Q2 was practically the same as in 2013Q2 but the employment level increased with no less than 1,7%-points. In Lithuania, employment increased with 0,9% but the employment rate with 1,4%, in the same period. The employment rate in Poland (38 million inhabitants) is at a (post-communist) record level. The post 2000 increase of the Spanish employment rate was largely due to an increase of the participation rate of women, the post 2007 decline was largely due to a decrease in the employment rate of men.