Wednesday

1st Jun 2016

Unemployment figures show EU's north-south divide

  • Construction worker: Germany recently invited skilled labourers from the south to move north (Photo: Valentina Pop)

Eurozone unemployment reached a record high of 12 percent in February with national statistics confirming the discrepancy between the more stable northern economies and the struggling southern ones.

Figures released the Eurostat agency on Tuesday (2 April) showed there are 19 million unemployed people in the 17-nation euro area and 26.3 million in EU as a whole. The EU-wide joblessness rate clocked in at 10.9 percent.

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The figures highlight the differences between core and periphery euro states.

Austria, Germany and Luxembourg had jobless rates of 4.8 percent, 5.4 percent and 5.5 percent, respectively.

By contrast, Greece and Spain's unemployment rate is 26 percent while Portugal is on 17.5 percent.

Unemployment among the under-25s is particularly high.

More than one in two young people are without work in Greece (58.4%) and Spain (55.7%). In Portugal, it is 38.2 percent and in Italy 37.8 percent.

Germany, the EU's strongest economy and the country shaping the budget-cutting response to the crisis, has a youth unemployment rate of 7.7 percent.

The European Commission reacted by calling the figures a "tragedy for Europe."

It recently set up a youth guarantee scheme under which member states should ensure young people receive an offer of work, continued education, or a traineeship within four months of leaving formal education or becoming unemployed.

Meanwhile, fund lines for growth boosting schemes broadly consist of re-allocated money or investment money that is supposed to be "leveraged" to create bigger sums with "added value."

The high unemployment rates, particularly among the youth, have led politicians to increasingly speak of a "lost generation" with little prospect of finding work.

“We are in a double dip recession. Unemployment is up, up and up. When is growth going to come?," Bernadette Segol, the head of the European Trade Union Confederation asked recently.

She suggested the persistent focus on austerity measures is leading to "doubts" about the benefits of belonging to the European Union.

The eurozone's growth prospects also compare badly with other regions. While the 17-nation currency area economy is expected to contract by a further 0.3 percent this year, the US economy is expected to grow 1.7 percent in 2013. China's GDP is growing at about 8 percent a year.

Finance ministers baulk at tax-avoidance rules

Member states will discuss again in June a proposed directive to outlaw practices used by large companies to avoid paying taxes. Meanwhile, the European Parliament makes progress on its probe of Panama Papers.

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