EUROPE 1, LE FIGARO (France)
PARIS - Unemployment has reached a new record high in the eurozone, with European Central Bank (ECB) President Mario Draghi saying Friday that the single currency would not recover until the second half of 2013.
"We have not yet emerged from the crisis," Draghi told France's Europe 1 radio on Friday morning. "The recovery for most of the eurozone will certainly begin in the second half of 2013.”
"It's true that budgetary consolidation entails a short-term contraction of economic activity, but this budgetary consolidation is inevitable," Draghi said.
This idea has often been criticized by Berlin, preferring a banking union between only the largest and strongest banks within the European single currency member states.
Meanwhile, it was announced Friday that the eurozone's unemployment rate figures were at a record high for the month of October, rising to 11.7%.
French daily Le Figaro reports that 25.9 million people living in the European Union (EU) were jobless in the month of October, with 18.7 million of those people living within the eurozone. In comparison to September, the number of unemployed people has risen by 204,000 in the EU, and 173,000 in the eurozone.
While Italy and Spain continue to struggle, the better performing eurozone countries such as Germany and France also faced disappointing figures Friday, with growth of just 0.2%.
Retail sales in Germany shrank 2.8% in October, down 0.8% on last year.
However, there were some positive signs, as the European single currency spiked to 1.3029 against the U.S. dollar on Thursday, its highest level since Oct. 23.
Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.
SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.
The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.
It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.
Seoul housing prices top London and New York
In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.
According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.
Average home loans are equivalent to 270% of annual income.
One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.
According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.
Playing the stock market
At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.
A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."
In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.
42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s
Game of survival
In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.
But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.
This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.
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