Article Critiques on Finance - Essay Example

For example, although, “ 70% of Swedes and 61% of Americans aged 55 to 64 work, a mere 32% of Austrians and Belgians in the range do [so].” In analyzing certain trends, the OECD report has divided its members into four groups having similar characteristics. These groups are “English speaking’, ‘Northern Europe’, ‘Continental and southern Europe’ and ‘Central Europe’. The first two of these groups have been successful in maintaining high employment rates. This, as per the report is attributed to the fact that countries in these two groups have, “weaker job protection; less generous unemployment benefits and thinner tax wedges than the average”.

The message here is clear, namely, that the best way to reduce unemployment is to get more people out to work by the simple expedient of loosening labour markets. Workers must have an incentive to work to make ends meet, which might not be enough motivation if unemployment benefits are too attractive, or conversely, if the take-home pay is not worth the difference in effort. Encouraging people to work until they are much older is one way of reducing the pension burden, but this is offset by the fact that, “ wages are often based on seniority not productivity”.

Hence a correct balance has to be drawn, especially since wastage through retirement is one of the methods of job creation. This article examines Europe’s attempts at a monetary union and whether in fact countries that have adopted the Euro have really benefited in terms if increased trade. When Britain stayed out of the merger, it was projected that should Britain join it would result in a possible increase in trade by as much as 50%, and living standards by up o 9%. However, studies carried out by Richard Baldwin do not support these estimates.

Baldwin has worked out that the increase in trade on the Euro adopting countries is only between 5% to 15%, with the average being 9%. The three EU countries that did not join