Last Word Europe Unemployment

Weigh the two arguments regarding unemployment in Europe. Is unemployment high because of high because of high natural rates of unemployment or because of deficient aggregate demand?

Argument #1 claims that high unemployment rates reflect the high natural rates of unemployment in Europe. Although most countries are working at full employment, frctional and structual unemployment occur naturally. The source of this natural rate of unemmployment is from governemnt policies and union contracts. Argument # 2 claims that high unemployment rates are due to defiecient aggregate demand. The cause of this is due to the government, who are fearful of their economy, so they dont implement fiscal or monetary policies, which would increase aggregate deman. The answer to the debate would most likely lie between the two arguements. Unemployment in Europe could be due to natural rates of unemployment as much as aggregate demand. Both arguments include the government as a cause and its policies play a large role in unemployment. Therefore the cause of this high unemployment would mostly be blamed upon the government.