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Germany

Is Europe's Strongest Economy Actually The Cause Of The Crisis?

Germany is Europe's only country that has roared back to pre-crisis employment numbers. Still, the International Labor Organization accuses German exporters of being no less than the structural cause of the current euro zone problems.

Germany is the Big Man of Europe, for better or worse (hpeguk)
Germany is the Big Man of Europe, for better or worse (hpeguk)
Catherine Chatignoux

PARIS - Germany's relatively low unemployment rate didn't stop the International Labor Organization (ILO) this week from delivering a brutal assessment of the European powerhouse.

Yes, the ILO 2012 report on global employment trends cites Germany as both the most powerful country in Europe and, along with Australia, the only developed country that has managed to boost its unemployment rate to below pre-crisis levels. But the authors of the report, presented on Tuesday, also accuse Germany of being no less than the cause of the current euro zone problems.

"Rising competitiveness of German exporters has increasingly been identified as the structural cause underlying the recent difficulties in the euro area," they denounced in an accompanying article inside the report.

The ILO targeted the "deflationary" wage policy implemented in Germany after reunification: "As German unit labor costs were falling relative to those of competitors over the past decade, growth came under pressure in these economies, with adverse consequences for the sustainability of public finances." "More importantly," adds the ILO, "crisis countries were barred from using the export route to make up for the shortfall in domestic demand as their manufacturing sector could not benefit from stronger aggregate demand in Germany."

In Germany, the increase in private consumption was more than 1% lower than other euro zone countries between 1995 and 2001. The strategy which aimed to return the country to productivity "created conditions for a prolonged economic slump as other member countries increasingly see only even harsher wage deflation policies as a solution to their lack of competitiveness." This was the last straw, according to the ILO's report, as the "internal devaluation" overly affected employees in the service sector, leaving manufacturing costs high.

Little has been done, on the other hand, to improve productivity itself.

Read the original article in French

Photo - hpeguk

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Society

In Northern Kenya, Where Climate Change Is Measured In Starving Children

The worst drought in 40 years, which has deepened from the effects of climate change, is hitting the young the hardest around the Horn of Africa. A close-up look at the victims, and attempts to save lives and limit lasting effects on an already fragile region in Kenya.

Photo of five mothers holding their malnourished children

At feeding time, nurses and aides encourage mothers to socialize their children and stimulate them to eat.

Georgina Gustin

KAKUMA — The words "Stabilization Ward" are painted in uneven black letters above the entrance, but everyone in this massive refugee camp in Kakuma, Kenya, calls it ya maziwa: The place of milk.

Rescue workers and doctors, mothers and fathers, have carried hundreds of starving children through the doors of this one-room hospital wing, which is sometimes so crowded that babies and toddlers have to share beds. A pediatric unit is only a few steps away, but malnourished children don’t go there. They need special care, and even that doesn’t always save them.

In an office of the International Rescue Committee nearby, Vincent Opinya sits behind a desk with figures on dry-erase boards and a map of the camp on the walls around him. “We’ve lost 45 children this year due to malnutrition,” he says, juggling emergencies, phone calls, and texts. “We’re seeing a significant increase in malnutrition cases as a result of the drought — the worst we’ve faced in 40 years.”

From January to June, the ward experienced an 800 percent rise in admissions of children under 5 who needed treatment for malnourishment — a surge that aid groups blame mostly on a climate change-fueled drought that has turned the region into a parched barren.

Opinya, the nutrition manager for the IRC here, has had to rattle off these statistics many times, but the reality of the numbers is starting to crack his professional armor. “It’s a very sad situation,” he says, wearily. And he believes it will only get worse. A third year of drought is likely on the way.

More children may die. But millions will survive malnutrition and hunger only to live through a compromised future, researchers say. The longer-term health effects of this drought — weakened immune systems, developmental problems — will persist for a generation or more, with consequences that will cascade into communities and societies for decades.

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