Friday

22nd Jun 2018

Eurozone unemployment hits new record

  • The spending cuts have resulted in an increasing number of protests across Europe (Photo: EUobserver)

There was more grim news for the 17-nation eurozone on Wednesday (2 May) as new figures showed that the unemployment rate reached 10.9 percent in March with a further 169,000 people losing their jobs compared to February.

The figure - translating into 17.4 million looking for work in the eurozone and the highest rate since the euro's introduction in 1999 - is up from 10.8 percent in February of this year and 9.9 percent in March 2011.

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The highest jobless rate was recorded in Spain - currently battling for a sharp reduction in its budget deficit - at 24.1 percent, followed by bailout counties Greece (21.7 percent in January) and Portugal (15.3%). Meanwhile, the third largest euro economy Italy, also in the throes of budget cuts, recorded a 12-year unemployment high of 9.8 percent.

The figures are likely to fuel the current debate in the EU about whether policies to date have exacerbated the crisis by focussing too much on debt reduction through austerity measures.

The European Commission called the figures "very worrying" and said that growth was at the "heart" of its agenda.

However, it is fighting a PR battle on that front. Having initially focussed only on the need for debt reduction to appease nervous markets, it was - along with the member state leaders - a late converter to promoting growth.

It has moderated its message to one of "consolidation" backed up by "targetted" investment. It also says the most important steps to be taken are reform labour market policies and making it easier for citizens from different member states to get to where the jobs are.

Last month it came out with an ideas paper on jobs suggesting the creation of an appropriate minimum wage and urging member states to exploit job creation potential in the ICT, health and healthcare sectors.

The first occasion for the commission to become concrete will be at the end of May when it publishes a series of policy recommendations for each member state.

"The country-specific recommendations ... will be addressing the improvement of the unemployment situation in Europe as well as the fiscal and more broad economic situations," said the commission's social affairs spokesperson.

They will feed into the traditional summer summit of EU leaders in June which is to focus on growth and employment issues.

The ideological shift towards growth promotion comes even as 25 member states have committed themselves to the fiscal compact treaty - a German-driven pact that enshrines balanced budgets into national law.

This in itself has become a major issue in the French presidential election where the socialist challenger Francois Hollande has pledged to renegotiate the text to make it more growth friendly if he gets into office following Sunday's election.

The French election is being keenly followed in Germany, where some of the countries newspapers have started describing Chancellor Angela Merkel as being isolated in Europe for her attachment to austerity.

Hollande's pledge is causing interest elsewhere too. In Ireland, due to have a referendum on the fiscal discipline treaty on 31 May, some voices have suggested the poll be postponed if Hollande wins to see what an adjusted treaty would look like.

Eurozone unemployment hits new record

Eurozone unemployment reached 10.8 percent in February, the highest level since the currency was introduced in 1999. Youngsters remain the most affected, with every second Spaniard under 25 unable to find a job.

EU unemployment hits record high

Twenty three million people in the EU are struggling to find jobs, as the economic crisis and austerity cuts unfold into severe social consequences.

Greece and creditors proclaim 'end of crisis'

After late-night talks, the Eurogroup agreed on a €15bn disbursement and debt relief measures for Greece, while setting out a tight monitoring when the bailout ends in August.

Greek bailout exit takes shape

At a meeting next week, eurozone finance ministers and the IMF are expected to agree on new cash, debt relief measures, and a monitoring mechanism to ensure that Greece can live without international aid for the first time since 2010.

Opinion

The risks behind the 'green bond' boom

The EU should not overuse the financial system in order to achieve environmental goals, or it risks the emergence of a green bond bubble which would be detrimental to the financial sector and hinder the achievement of climate targets.

Opinion

Eurozone needs institutional reform

Both the examples of Greece and Italy test the limits of a system with inherent weaknesses that feeds internal gaps, strengthens deficits and debts in the European South, and surpluses in the European North respectively.

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