Euro zone unemployment at record high of 12.2 per cent
01 Jun 2013
Unemployment rate across the 17 European countries using the euro was at a record high of 12.2 per cent in April, with the number of unemployed set to reach 20 million by year's end.
According to commentators, the worsening job crisis pointed to the recession that had gripped the euro alliance with many countries struggling to stimulate growth while grappling with a debt crisis that had led governments to spending and increase taxes.
Unemployment in the euro zone was up in April from the earlier record of 12.1 per cent set in March, according to Eurostat, the European Union's statistics office. In 2008, before the worst of the financial crisis, the rate was much less -- around 7.5 per cent.
The number of unemployed was up 95,000 to 19.38 million in the currency bloc's population of around 330 million.
Private companies in the euro zone had not been able to fill the vacuum caused by drastically reduced government spending. In the US, by contrast, governments had imposed far milder spending cuts and tax increases, and unemployment at 7.5 per cent, was far lower. Meanwhile, consumers and private companies had continued to spend, steadily if modestly.
However, unemployment rate for the overall euro zone masked sharp disparities among individual countries, with unemployment in Greece and Spain exceeding 25 per cent, while in Germany, the rate was a low 5.4 per cent.
Despite the rise, though, most analysts do not expect the European Central Bank to cut interest rates or take other action to stimulate growth during its policy-making council meeting in the coming week. According to separate data from Eurostat, inflation in the euro zone was up at 1.4 per cent from 1.2 per cent, which could prompt the central bank to wait for clearer signs that there was no risk of higher prices.
According to analysts, the continued rise in youth unemployment was particularly alarming, with nearly a quarter of job-seekers under age 25 unemployed across the zone. Youth joblessness touched 62.5 per cent in Greece and 56.4 per cent in Spain in April, according to Eurostat, holding out the prospect of it becoming a long-term drag on growth with young people not able to start their careers.
