28th Oct 2016

Hundreds of thousands more jobs to go, EU warns

  • Rehn: "reforms ... should begin to bear fruit" (Photo:

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

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.

News in Brief

  1. Budget commissioner Georgieva takes up World Bank post
  2. Walloon parliament votes to accept Ceta
  3. Euro deficit to fall below 2% next year, commission says
  4. Migration and security top Germany's EU agenda
  5. EU finance rules need 'neutral' enforcer, Germany says
  6. Northern Ireland court rejects Brexit case
  7. EU tables Atlantic sea bass fishing ban
  8. EU states issue record number of residence permits

Stakeholders' Highlights

  1. Nordic Council of MinistersUN global sustainable development goals, integration, and security on agenda for Nordic Council Session 2016
  2. Taipei EU OfficeTaiwan Seeks to Join Fight against Global Warming
  3. ANCI LazioAnci Lazio Definetely has a lot to Celebrate This Year
  4. EU-China ForumDebating the Future of the EU-China Relations on 28 November in Prague
  5. COMECEMigrants: From Fear to Compassion
  6. Birdlife EuropeBusiness as Usual - Juncker Snubs Environment and Protects Broken CAP
  7. EFADraft Bill for a 2nd Scottish Independence Referendum
  8. UNICEFCalls on European Council to Address Plight of Refugee and Migrant Children
  9. ECTAJoin us on 9-10 November in Brussels and Discover the new EU Digital Landscape
  10. Access NowCan you Hear me now? Verizon’s Opportunity to Stand for Global Users
  11. Belgrade Security ForumMeaningful Dialogue Missing Not Only in the Balkans, but Throughout Europe
  12. EuropecheEU Fishing Sector Celebrates Sustainably Sourced Seafood in EU Parliament

Latest News

  1. Belgium green lights unchanged Ceta
  2. Poland rejects EU 'interferences' on rule of law
  3. On-road emissions tests: How EU failed to change to the fast lane
  4. Dutch PM asks opposition's help on Ukraine agreement
  5. Wallonia's heroic stand against Ceta is a stand for democracy
  6. Calais children abandoned at former camp site
  7. Greece to probe UN allegations of illegal returns
  8. Poland defies EU on rule of law