8 January 2013 Last updated at 08:10 ET

Eurozone unemployment reaches new high

 

Rabobank's Jane Foley says unemployment is the legacy of the transitions many countries are going through

The unemployment rate across the eurozone hit a new all-time high of 11.8% in November, official figures have shown.

This is a slight rise on 11.7% for the 17-nation region in October. The rate for the European Union as a whole in November was unchanged at 10.7%.

Spain, which is mired in deep recession, again recorded the highest unemployment rate, coming in at 26.6%.

More than 26 million people are now unemployed across the EU.

For the eurozone, the number of people without work reached 18.8 million said Eurostat, the official European statistics agency said.

'Continuing saga'

Greece had the second-highest unemployment rate in November, at 20%.

The youth unemployment rate was 24.4% in the eurozone, and 23.7% in the wider European Union. Youth unemployment - among people under 25 - was highest in Greece (57.6%), followed by Spain (56.5%).

Overall unemployment was lowest in Austria (4.5%), Luxembourg (5.1%) and Germany (5.4%).

The eurozone and wider European Union economies are struggling with recession as government measures to reduce sovereign debt levels have impacted on economic growth.

However, European Commission President Jose Manuel Barroso said on Monday that he believed the worst was over.

Mr Barroso said the turning point was last September's promise from the European Central Bank to buy unlimited amounts of eurozone states' debts, which has helped crisis hit countries borrow more cheaply.

But in the view of the UK's Institute of Directors, whose members rely on demand from trading partners in the eurozone, this "has bought time, but that is all it has done".

"It is clear that the economic implosion of several member states continues at a troubling pace," said the business group's chief economist Graeme Leach.

"The headline figures spell bad news, but that is compounded by the political and human impact of terrifying levels of youth unemployment in Spain, Greece and Italy.

"This saga is far from over, whatever President Barroso may believe, and it seems it is set to get worse in 2013."

'Very shocking'

BBC Economics Correspondent Andrew Walker said: "The biggest rises, in percentage terms, were in countries at the centre of the eurozone financial crisis - Greece, Spain, Cyprus and Portugal. One striking exception to that pattern was the Republic of Ireland where unemployment fell.

"The general trend however remains upwards and it makes it even harder for the governments concerned to collect the taxes they need to stabilise their debts."

Rabobank economist Jan Foley said the rise in unemployment was "the other side of austerity or structural reform."

"There is a very worrying picture painted by these numbers, and governments do need to wonder if they need more pro-growth strategies in the next few years," she told the BBC's News Channel.

The record low for the eurozone unemployment rate was 7.2%, which was recorded in February 2008, before the financial crisis that first gripped the banking sector spread to the real economy.

The historic low for the eurozone youth unemployment rate was 15% in March 2008.