This seriously harms the economy, because these people who are willing but unable to work are being prevented from developing their skills. To avoid creating a “lost generation” we need to act quickly. Issues such as this illustrate clearly that the current economic recovery needs to be further supported by policymakers taking decisive action.
The Governing Council of the ECB refused to do this, clarifying that it was not warranted to reduce further interest rates, which were at the level of 2%, without putting at risk price stability in the medium term. Similarly, ten out of the twelve euro area governments publicly criticised our interest rate rise at the end of 2005.