(The following article is from the June 1-15,  2010 issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to: People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)

Special to PV

The International Labour Organization has released statistics which indicate that the global economic crisis is far from over. The ILO's "Global Job Crisis Observatory report of May 13 http://www.ilo.org/pls/apex/f?p=109:1:0 warns that "the Greek crisis has morphed from a fiscal crisis in a single country to a regional crisis for the euro zone and has sent shock waves through stock markets worldwide."

     The report goes on to warn about the consequences of downgrading of Greek, Portuguese and Spanish bonds during April, "making the financing of their deficits more costly and raising questions about possible future problems that may eventually require bailouts or restructuring. The financial health of the banks that are holding this debt - the bulk is held by European banks - has now also deteriorated raising concerns for renewed troubles in the banking sector, which has yet to fully recover from the global financial crisis... Some observers have questioned the viability of the European Monetary Union itself, amidst fears that some countries might be forced to exit from the common currency. This has led to a loss of confidence in the euro which has fallen against the dollar from $1.45 at the beginning of the year to below $1.30."

     In Western Europe, the recovery is said to be "on track", but industrial production remains 15.9 per cent below its peak of April 2008. Unemployment remained at 10 per cent in March for the euro area, about 0.2 percentage points higher than July 2009, showing that the "recovery" has not brought job creation.

     Although world trade continues to pick up gradually, the trade recovery remains "subdued" in the developed capitalist countries, where export volumes are still 14 per cent lower than two years ago. A return of global trade to pre-crisis levels "should not be expected any time soon despite the strong recovery of developing country exports," says the ILO.

     Meanwhile, fears are mounting about the economic situation in the largest capitalist economy, the United States. Recent testimony before President Obama's "bi-partisan commission" on the country's budget gap projects bigger deficits for the forseeable future, leading mainstream economists to focus on this as the number one priority.

     But a more immediate crisis is the loss of 8 million jobs during the past two years. Fifteen million people are officially unemployed in the U.S. while another 11 million are involuntarily working part-time or have dropped out of the labor force. Millions have been without a job for more than a year, with no end in sight. Payroll jobs increased for a third straight month in April, but the unemployment rate increased to 9.9% because the labor force grew faster than employment.

     More ominously, the International Monetary Fund is now pointing to the danger of a sovereign debt crisis impacting all major economies. The IMF's recent fiscal monitor projects that by 2015, the proportion of public debt to GDP will reach 110% in the U.S., 250% in Japan and 91% in the UK, with comparable figures for most other large economies in Europe. These numbers do not even recognize unfunded contingent liabilities, which in the United States would add another 400-600% to the debt to GDP ratio.

     The inescapable conclusion is that the recent events in Greece, which are now impacting the entire Eurozone economy, will inevitably hit the United States and Canada. When that happens, the crisis which broke out in the fall of 2008 may seem like small potatoes.