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
    +6

    Comment number 154.

    136.jay
    ...except you were in a currency union which set too low an interest rate for the Irish economy (& others eg Spain), fostering just the right conditions for a credit & housing boom (& then bust). That rate did just nicely for Germany though (& continues to do so, relatively speaking). Ever wondered why the ECB is based in Frankfurt?

  • rate this
    -4

    Comment number 153.

    The cost of all this unemployment and consequential social problems will massively outweigh the savings made by austerity.......

    The medication is killing the patient....

  • rate this
    +8

    Comment number 152.

    Croatia join the EU in July and they bring with them about a 25% unemployment rate.

  • rate this
    +8

    Comment number 151.

    Let's be clear , the EU has 24 out of 28 'NET Beneficiaries' - is it any wonder that they are supportive of it ? Germany supports it because following the devaluation of their currency THEIR exports became Cheaper and they continue to benefit. France also likes the benefit to its militant agri businesses. See how countries are only interested in how THEY benefit ? This is the EU in action!

  • rate this
    -3

    Comment number 150.

    135. Titan

    If you don't understand just say so. No one will think any less of you.

  • rate this
    +4

    Comment number 149.

    144.farkyss

    "...This is what happens when you bind disparate economies together under common rules..."

    ===

    Like Tyne and Wear with the City of London, you mean?

  • rate this
    +6

    Comment number 148.

    136. jay - Cheap credit has been abused by the people of Europe, but to say that no EU Government spent money that simply was not there is innacurate. Real growth comes from industry, making things and providing services to others, not massive public sector worker programmes and the debts that incurrs. The EU are incapable of change or reform, too many vested interests from Members.

  • rate this
    +11

    Comment number 147.

    136.
    jay
    "Blaming Angela Merkel or the EU is a frankly pathetic attempt at passing the buck from people who don't want to accept the truth".

    There were clear rules and economic standards countries wanting to join the Eurozone were supposed to meet . These were ignored by Germany and France in particular and the EU in general so who do we pass the buck to?

  • rate this
    +4

    Comment number 146.

    Labour-saving machines don't buy anything: fewer employees = fewer potential customers.

    With companies seeking ever more technologically efficient ways of producing food and goods, and with population increasing with no political acknowledgement of this as a future issue, not to mention ineffectual controls on immigration - is it any wonder there's an imbalance between jobs and people?

  • rate this
    +1

    Comment number 145.

    time4change
    "It is NOT the job of govt to spend other peoples money to create work."
    You don't understand what money is. The UK Govt does not control the money supply, this is given over to private banks. If Govt did so it would be possible to issue debt free money in direct exchange for labour. This would solve the unemployment problem, as with Lincoln's Greenbacks and Germany in the 1930s.

  • rate this
    +20

    Comment number 144.

    It'll get worse before it gets better.

    This is what happens when you bind disparate economies together under common rules. It is a damning indictment of a federal Europe, and we'll be far better off ditching it in favour of the European Free Market that we originally voted and agreed ro.

  • rate this
    -2

    Comment number 143.

    As reported here http://www.bbc.co.uk/news/business-22728020 EU member states are focused upon exports. That is the entire continent while unemployment is known will increase further.

    So, it is time for governments, the EC, and economists to explain the logic behing the economic policies. It is a policy of slave labour and everyone should be honest about this. It will cost more jobs, politicians.

  • rate this
    +4

    Comment number 142.

    140.Print This

    "...Over the next 10 years as the baby boomer generation begins to retire en masse..."

    ===

    Yet the BBC keeps softening us up to be told we won't be allowed to retire, at least, to draw a pension.

  • rate this
    +5

    Comment number 141.

    Levels of unemployment in worst hit economies like Greece and Spain are at levels comparable to the great depression. The "austerity" program that does not add liquidity to the Euro but instead protects its value is only making their situation worse all the time.It isn't clear if those societies have reached or soon will reach a tipping point where they won't be able to recover from social unrest.

  • rate this
    0

    Comment number 140.

    The real tragedy here is that the Governments of the EU already long ago resigned themselves to the solution - The ageing megatrend.

    Over the next 10 years as the baby boomer generation begins to retire en masse jobs will likely be plentiful. Whether the skill sets will be there is another question. In the meantime government will just try to maintain the status quo no matter who suffers.

  • rate this
    -3

    Comment number 139.

    I'm appalled to see my earlier comment (64) sliding down the Lowest Rated list.

    Perhaps I'm not the only one who wants to see a serious evaluation of the black economy, both here and in the officially recession-bound Eurozone countries?

    I wouldn't pre-judge the findings - but it would be interesting, n'est-ce pas?

  • rate this
    +5

    Comment number 138.

    125.markthesensible

    Second. As an employer I can give another 20-30 people a full-time job tomorrow. They just don't want it. I have staff now that think 25-30 hours is full-time?? Barmy!'

    Can you give me an idea of the pay and conditions?

  • rate this
    +28

    Comment number 137.

    @ 128.Praise Him

    "Any move towards a single currency should be viewed with extreme scepticism. The Bible warns us such a move spells disaster"

    I thought this was a really funny post until it dawned on me that you might actually be serious...

  • rate this
    +26

    Comment number 136.

    I'm somewhat sceptical of the arguments and comments linking this to the "european project" and the EU. As an Irishman, our country was wrecked by debt, greed and corruption linked to a housing bubble. It was Irish people who wrecked our economy, the same in Greece etc. Blaming Angela Merkel or the EU is a frankly pathetic attempt at passing the buck from people who don't want to accept the truth.

 

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