The cover story of the European edition of Time Magazine is titled "Why Europe Can't Get Off the Ground". The extensive article highlights the destructive impact of overly generous labour legislation and excessive indebtedness on employment.

Spain with an unemployment rate of more than 20 percent provides anecdotal evidence of difficulties created for the labour force when excessive demands are placed on employers.

The Polos, which Time refers to as the typical Spanish family, is led by the father Jesus, 59, who as an accountant for an electrical parts supplier. He is protected by extensive rights awarded to permanent employees by the Spanish Government. By Jesus' estimate, his employer is obligated to pay out as much as $120,000 to Jesus in mandated severance payments should he be made redundant.

At first glance this may be wonderful for Jesus; however his 29-year-old daughter Maria is unable to gain permanent employment because employers are reluctant to take on a permanent commitment until they see a convincing recovery in the economy; consequently Maria has floated from one temporary contract to another.

Jesus confirms that despite his generous benefits, he feels unstable because his daughter's life is unstable. The Spanish Government, as well as Governments of other under-performing European economies, is in the process of trying to roll back employer obligations in an effort to bring down stubbornly high rates of unemployment.

This has been somewhat characteristic of the southern European countries which, combined with Ireland, form the grouping referred to as PIIGS - Portugal, Ireland, Italy, Greece, and Spain - wherein indebtedness is coincident with high benefits to labour.

For instance, in Greece women are allowed to retire at 53 and men at 58. For being employed 12 months, one of which is holiday, the Greek worker is actually paid for 14 months.

The indebtedness of the PIIGS is putting immense strain on the euro as a currency and in a worse case scenario could result in the dissolution of the European Union. For this reason, these weaker European countries are being required to radically reduce spending and debt. This in the near term undermines growth and prolongs recession but the alternatives are far worse.

Bermuda's Government must rationalise spending to more sustainable levels so as to support employment and allow Bermuda's employers to compete effectively in the global economy. Secondly, Bermuda must maintain labour legislation that is flexible and supportive of employment rather than so onerous that employers choose not to recruit and/or direct various functions to other lower-cost jurisdictions.