The English Speakers Vs. The Continent

While the free market bigots are pointing at the European economic model as a failure because of the Euro crisis, David Marsh and Robert Bischof at the Guardian say not so fast (h/t Mark Thoma):

There is a much more fundamental gulf, hinted at by Angela Merkel in her Davos speech yesterday: between countries with organised industrial training systems such as Germany, the Netherlands, Belgium, Scandinavia, Austria and Switzerland – all currently with jobless rates of between 3% and 7% – and those with much higher rates of unemployment, often in double digits, in peripheral Europe. The issue pits Anglo-Saxon precepts of free market regulation against the Germanic "Rhineland" system of managed capitalism, with modern apprenticeship systems built on a long-term compact between labour and employers. In the years before and immediately after the euro's birth in 1999, the peripheral countries of the European monetary union (Emu) often followed Anglo-Saxon principles by liberalising parts of notoriously inflexible labour markets. "Hire and fire" became the motto.
Initially this seemed to work. But as debt market conditions worsened and growth stalled after the 2007-08 financial crisis, Emu's periphery has been left seriously exposed by the failure to replace unproductive regulations with new mechanisms to generate jobs.
In the battle between rival systems, "Rhineland capitalism" appears to be winning hands down. In the two years since the global economic downturn in 2009, Germany has expanded employment by 1.8m, while the UK, US, France, Italy and Spain have shed 7m jobs. In 2007, when most other countries were nearing the end of a boom driven by excess credit, Germany had the highest unemployment rate (8.7% of the workforce on a harmonised basis) of the group of seven leading industrialised countries. Yet in late 2011, according to OECD figures, German unemployment, at 5.2%, was the lowest in the G7 apart from Japan.

I think this is one of the major points of the Great Recession which many of the free market types haven't quite figured out yet.  We can't have sustained rates of high unemployment, especially amongst the youth.  Somebody, whether it is government or private sector (obviously the government is more likely), has to make work for folks to do, or there will be serious trouble.  State stability is at risk.  Nobody in support of the "free market system" seems able to perceive this.  I don't understand why they are so blind.