But I doubt that the worst is already behind us, since the structural problems of insolvency and lack of competitiveness faced by some countries have yet to be solved.
The Deutsche Post “Happiness Atlas 2013”, which is being presented this week in Berlin, provides a fresh look at the euro crisis along with information on happiness levels across Europe. From the time we began collecting this kind of data, never have so many Europeans been as unhappy with their lives as in these last 18 months, and never have the differences between individual countries been greater.
Today, satisfaction levels in Europe’s happiest country, Denmark, generate a medium-level score of 8.9. In Europe’s most unhappy country, Greece, the score is just 3.4. This means a 5.5-point difference between the highest and lowest scores. Ten years ago, this difference was just 3.5 points. The low scores in crisis countries such as Spain (5.9) and Portugal (3.7) are evidence of a significant decrease in quality of life since 2007.
Happiness research also points to the source of this unhappiness. It is certainly not the direct result of abstract economic data on debt levels (as significant as this may be). The key happiness factor, more than anything else, is the current situation on the job market – and the uncertainty that goes along with this. Factors such as poverty and lack of medical care also play role in some places today. The (temporary) absence of new news about the crisis and shaky financial markets cannot and should not belie the fact that Europe is deeply divided and in the midst of a massive social crisis. We might have reached the bottom of the valley this year, but we have yet to pass through the valley.
The happiness research also reveals that, in many countries today, economic growth per se is only a minor contributor to an individual’s sense of happiness or well-being. The relative happiness of northern Europeans is not due to their higher rates of consumption and purchasing power, but the result of a comparatively healthy job market and their continued access to good, secure jobs. Germany is a good example of this. Here, the decline in growth was particularly steep in 2009, but because this did not result in employment losses, Germans were able to maintain their quality of life.
The results of the happiness research present a challenge to our economic policymakers and crisis managers. Is debt reduction and austerity really more important, or should effort be focused more on creating jobs as fast as possible in order to maintain happiness levels and social stability?
If we take the results of economic happiness research seriously, the top priority has to be the fight against unemployment. High unemployment contributes not only to the current lack of opportunity and sense of hopelessness and anxiety across large parts of southern Europe (in particular among the younger generation), but also has a significant negative impact on people’s sense of personal, economical and social well-being over the long term. In addition to this, there is the million-fold loss of professional qualification that goes hand-in-hand with massive unemployment. Seen from this perspective, it becomes all the more urgent to reform the very structure of Europe’s job markets. Germany has set an example with its Agenda 2010 – undoubtedly a painful step to take at the time, but a step which has ultimately succeeded in creating more jobs.
This by no means disproves the basic argument behind stricter austerity policies. To be sure, no country will be able to climb out of debt without sound budgeting. But perhaps the occasional debt is the better choice – a way to not only create more room for investment opportunities, but also to stabilize demand. Still, the best way to increase competitiveness and create more jobs is to strengthen productivity within the heavy-hit crisis zones. Certainly investments in education are of critical importance here over the long term. However, in order to overcome the employment crisis in the short and medium term, there should also be targeted investments in infrastructure. Logistics is no small factor in this regard – an area where central Europe has a significant locational advantage over southern Europe. The population density in countries such as The Netherlands, Belgium or western Germany, in combination with a modern transportation infrastructure, makes for a significantly more efficient system of transportation compared to the towns and cities along the Mediterranean coast. Selected investments in more modern and comprehensive logistics systems could therefore make an important contribution to increasing the competitiveness of southern European countries.
Putting this crisis behind us will undoubtedly require effort and engagement on all levels. With a little luck, unemployment in Europe will no longer be at 12 percent a few years from now, but back down to 6 percent, and happiness levels will once again be on the rise. Then perhaps we can take a closer look at which goods and services generated by all the work being done are truly important to our sense of well-being.