Rita Rodrigues and Joao Franco expect to find work when they graduate from one of Portugal’s top universities, but they’re less confident about the pay.
“I don’t have very high expectations,” said Rodrigues, in the final year of an economics degree at the ISEG Lisbon School of Economics and Management. “I’m not going to earn a lot right from my initial job,” added Franco, who is completing a management degree, saying students have to “fight for the opportunities.”
The two 21-year-olds might be considered lucky to be preparing to enter the workforce now, as a flood of European Central Bank stimulus cuts unemployment and buoys economic growth. If they want to know how long that monetary support will last and when pay might finally pick up, this is their chance — ECB President Mario Draghi will visit the university on Monday on the way to his institution’s annual forum in nearby Sintra.
The trip will be a reminder of the problems still facing the euro economy even after more than four years of expansion. The region’s jobless rate is above 9 percent — and almost 19 percent for young people. That’s dragging on wage growth and so curbing inflation. And southern European nations such as Portugal and Italy are largely faring worse than their northern neighbors.
It may all be enough to reinforce the ECB chief’s view that it’s too soon for policy makers to think about winding down their 2.3 trillion-euro ($2.6 trillion) bond-buying program, currently scheduled to run until at least the end of this year. He has already lamented that economic growth isn’t generating enough high-quality jobs.
“The ECB alone cannot solve the youth-unemployment problem, which is one of the bigger issues now,” said Holger Sandte, chief European analyst at Nordea Markets in Copenhagen. “What they can do is make sure their policies keep the recovery on track and hope politicians will use it to create opportunities for young people.”
After the Youth Dialogue, Draghi will travel to the hilltop resort of Sintra for the ECB Forum, where former U.S. Federal Reserve Chairman Ben Bernanke will speak at the opening dinner. The ECB head will give a keynote on Tuesday, before Executive Board members chair a series of academic panels on investment and growth. The event wraps up on Wednesday with a discussion between Draghi, Bank of England Governor Mark Carney, Bank of Japan Governor Haruhiko Kuroda and Bank of Canada Governor Stephen Poloz.
Data this week will likely back up the story of the euro-area economy humming along nicely in most respects except what matters most to the ECB: inflation that can be sustained and stable just below 2 percent.
|June 26||German business confidence||114.5||114.6|
|June 27||Italian manufacturing confidence||106.7||106.9|
|June 28||French consumer confidence
Spanish retail sales
|June 29||Euro-area economic confidence||109.5||109.2|
|June 30||German unemployment