Eurozone unemployment reaches new record high in April

 

The BBC's Jamie Robertson says the employment figures show "disparity across Europe"

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Unemployment in the eurozone has reached another record high, according to official figures.

The seasonally-adjusted rate for April was 12.2%, up from 12.1% the month before.

An extra 95,000 people were out of work in the 17 countries that use the euro, taking the total to 19.38 million.

Both Greece and Spain have jobless rates above 25%. The lowest unemployment rate is in Austria at 4.9%.

The European Commission's statistics office, Eurostat, said Germany had an unemployment rate of 5.4% while Luxembourg's was 5.6%.

The highest jobless rates are in Greece (27.0% in February 2013), Spain (26.8%) and Portugal (17.8%).

In France, Europe's second largest economy, the number of jobless people rose to a new record high in April.

"We do not see a stabilisation in unemployment before the middle of next year," said Frederik Ducrozet, an economist at Credit Agricole in Paris. "The picture in France is still deteriorating."

'Social crisis'

Youth unemployment remains a particular concern. In April, 3.6 million people under the age of 25 were out of work in the eurozone, which translated to an unemployment rate of 24.4%.

Figures from the Italian government showed 40.5% of young people in Italy are unemployed.

Analysis

Europe's already dismal jobs situation has deteriorated further. If we needed a reminder of the lingering effects of the eurozone financial crisis, it is to be seen in the jobs data.

The general pattern is that the largest increases in unemployment over the last year were in countries at the centre of the crisis - Greece, Cyprus, Spain and Portugal. There was also a sharp increase in Slovenia, a country seen as a possible future candidate for a financial rescue.

The main exception to the pattern was Ireland, another country receiving a bailout, where unemployment nonetheless fell by almost one and half percentage points in twelve months.

The figures also highlight the "lost generation" concern that is, or should be, causing some lost sleep for political leaders. Unemployment among young people is approaching one in four across the eurozone and it is 40% or higher in a few countries - Greece, Spain, Portugal and Italy.

"We have to deal with the social crisis, which is expressed particularly in spreading youth unemployment, and place it at the centre of political action," said Italy's President Giorgio Napolitano.

In the 12 months to April, 1.6 million people lost their jobs in the eurozone.

While the jobless figure in the eurozone climbed for the 24th consecutive month, the unemployment rate for the full 27-member European Union remained at 11%.

The eurozone is in its longest recession since it was created in 1999. At 1.4%, inflation is far below the 2% target set by the European Central Bank (ECB).

Consumer spending remains subdued. Figures released on Friday showed that retail sales in Germany fell 0.4% in April compared with the previous month.

Earlier this week, the Organisation for Economic Co-operation and Development (OECD) predicted that the eurozone economy would contract by 0.6% this year.

According to Carsten Brzeski, an economist at ING, in the past, the eurozone has needed economic growth of about 1.5% to create jobs.

Graphic
ECB action?

Some consider that the ECB needs to do more than simply cutting interest rates to boost economic activity and create jobs.

Earlier this month, the ECB lowered its benchmark interest rate to 0.50% from 0.75%, the first cut in 10 months, and said it was "ready to act if needed" if more measures were required to boost the eurozone's economic health.

In its report earlier this week, the OECD hinted that the ECB might want to expand quantitative easing (QE) as a measure to encourage stronger growth.

Nick Matthews, a senior economist at Nomura International, said: "We do not expect a strong recovery in the eurozone.

"It puts pressure on the ECB to deliver even more conventional and non-conventional measures," he added.

The European Central Bank is due to meet next week.

 

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  • rate this
    -56

    Comment number 155.

    Rome wasn't built in 1 day. If everybody gave up at the first hurdle, none would have invented the wheel. A Federal Europe is the only way.

  • rate this
    +65

    Comment number 97.

    I used to think Europe and one shared currency was a good idea. Pulling together to solve problems, less conflict, a good mix of diverse and interesting people, easier travel, easier to judge the value of things.

    However all we have seen is greed, bankruptcy, mismanagement, unemployment and debt!

  • rate this
    +88

    Comment number 88.

    The problem with the Eurozone is that rather than being a practical project it was more an ideological project. This meant rather than applying robust fiscal rules on who could join, figures were massaged and rules bent or ignored to allow countries to joint whose economies were not suited to this form of union.

  • rate this
    +58

    Comment number 85.

    The EU could and should be a force for such good - free trade, common prosperity ... a powerful trading bloc to compete against US, China etc. Instead it's become a socialist monster, sucking-in hundreds of billions of taxpayers money and wasting 90% of it, propping-up bust industries like the French farmers. Time for some sort of change surely .......

  • rate this
    +67

    Comment number 62.

    The Eurozone is only as strong as its weakest link, and the trouble is that there's no shortage of candidates for that dubious honour.

 
 

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