Friday

29th Mar 2024

Hundreds of thousands more jobs to go, EU warns

  • Rehn: "reforms ... should begin to bear fruit" (Photo: ec.europa.eu)

About 730,000 more people will lose their jobs in the EU before the economic crisis starts to ease off, the European Commission said on Wednesday (7 November).

The grim outlook, part of the commission's regular economic forecasting, is based on a prediction the jobless rate in the Union will go from 10.6 percent today - already a record number - to 10.9 percent next year before dropping to 10.7 percent in 2014.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The rate will climb to 26.6 percent in Spain and 24 percent in Greece next year, with double-digit levels in 11 other member states.

The commission also said the EU's economy will keep on shrinking this year, but begin to grow by 0.4 percent next year.

At the same time, government deficit and debt levels will keep on getting smaller.

The turnaround will not be felt in some parts of the Union. The Cypriot, Greek, Italian, Portuguese, Spanish and Slovenian economies will contract in 2013. Government deficit levels will stay above the EU's 3-percent-of-GDP-marker for sound finances in 11 countries. British, Irish and Spanish government borrowing is to stay at more than twice the EU rule.

For his part, EU economic affairs commissioner Olli Rehn told press in Brussels the bitter pill of EU-mandated austerity is beginning to work.

"The structural reforms undertaken should begin to bear fruit over the forecast period," he said.

But with the International Monetary Fund recently joining economists such as Nobel winner Paul Krugman in saying that too much austerity and not enough stimulus will stymie recovery, Rehn admitted the budget cuts are problematic.

"The large internal and external imbalances that built up in the pre-crisis years are being reduced, but this process continues to weigh on domestic demand in some countries," he added.

Amid urgent risk of bankruptcy in Greece and the prospect of two more EU bailouts - for Cyprus and Spain - Rehn also noted that sovereign bond markets still pose a threat to stability.

"Major policy decisions have laid the foundations for strengthening confidence ... [but] difficulties in parts of the banking sector and the weak economy are likely to continue to weigh on credit supply," he said.

In a rare moment of levity amid speculation on the survival of the euro, an audience member's mobile gadget accidentally played a funeral march in the press room while the Finnish official was speaking.

The tune "might be appropriate" for the subject at hand, Rehn quipped.

Rehn to get increased economic powers

EU monetary affairs commissioner Olli Rehn is to be given extra powers to supervise national fiscal policies, as the commission moves quickly to centralise economic governance powers in Brussels.

Opinion

Small businesses: silent sufferers in the economic crisis

The economic crisis is also playing havoc with entrepreneurs and small businesses who face financial ruin when their bills don't get paid. In Hungary, writes the Magdolna Csath, the situation is undermining societal cohesion.

Opinion

US fiscal cliff not averted, but postponed

Rather than a deal, the US fiscal cliff talks reflect still another delay. However, the time will run out in the next 4-8 weeks. The net effect will reverberate across Europe and the world economy, writes Dan Steinbock.

Opinion

EU Modernisation Fund: an open door for fossil gas in Romania

Among the largest sources of financing for energy transition of central and eastern European countries, the €60bn Modernisation Fund remains far from the public eye. And perhaps that's one reason it is often used for financing fossil gas projects.

Latest News

  1. Kenyan traders react angrily to proposed EU clothes ban
  2. Lawyer suing Frontex takes aim at 'antagonistic' judges
  3. Orban's Fidesz faces low-polling jitters ahead of EU election
  4. German bank freezes account of Jewish peace group
  5. EU Modernisation Fund: an open door for fossil gas in Romania
  6. 'Swiftly dial back' interest rates, ECB told
  7. Moscow's terror attack, security and Gaza
  8. Why UK-EU defence and security deal may be difficult

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us