Unemployment rate in euro area all time high

Unemployment rate in euro area all time high

LONDON - The Associated Press
Unemployment rate in euro area all time high

Cranes stand idle at an empty shipyard in Vigo due to a loss of orders on April 27. Spain’s jobless rate hit a record 24.4 percent in a deepening recession in the first quarter, data showed yesterday, piling on the misery after a sharp credit-rating downgrade. AFP photo

Record unemployment figures for the 17 countries that use the euro released yesterday are set to increase the pressure on Europe’s leaders to switch from a focus on harsh austerity measures to push for a pro-growth strategy.

Unemployment across the 17-member eurozone rose to 10.9 percent in March, its highest level since the euro was launched in 1999, official figures showed yesterday.

The rate was up from 10.8 percent in February and 9.9 percent a year ago, and reflects the downturn in the eurozone economy as governments pursue tough austerity measures to deal with their debts. Nearly half the countries in the eurozone are now officially in recession.

The figures from European statistics office Eurostat are likely to ratchet up the pressure on the region’s policymakers to introduce more pro-growth measures alongside the spending cuts and tax increases they have already introduced in an attempt to fix their debt crisis.

‘Calls for austerity easing’

Michael Hewson, an analyst at CMC Markets, said the figures are “likely to prompt further calls from EU leaders affected by rising unemployment to call for an easing of austerity, from EU leaders and Berlin is particular.” However, he said this will likely be resisted by politicians in Germany, “conscious of the fact that the worst of the crisis appears to be staying outside their borders for now.” Spain has the highest proportion of its people unemployed in the eurozone at 24.1 percent. The rate for the under 25s is 51.1 percent.

Greece was close behind, though its figures date back to January. The country, which has had to receive two massive international bailouts to avoid a messy default on its debt payments, has a general jobless rate of 21.7 percent, with 51.2 percent of young people out of work.

The lowest unemployment rate in the eurozone was recorded in Austria, which has only 4 percent of its working population out of work. The Netherlands, which saw its government collapse last week over disagreements on austerity measures, was not far behind at 5 percent.

This weekend, as Greece and France head to the polls, there are hopes, certainly among the ranks of the 17.4 million people unemployed in the eurozone that there may be a change of strategy in Europe over how to deal with the two-year debt crisis that’s already seen three countries bailed out and raised the specter of the break-up of the single currency.

“With the potential changing of political leaders, coupled with confirmation that nearly half of the eurozone is officially in recession, the strategy of continuing austerity is being widely challenged,” said Gary Jenkins, managing director of Swordfish Research.

The unemployment rate across the wider 27-country European Union, which includes non-euro members like Britain and Poland, was 10.2 percent, unchanged from February but still higher than the 9.4 percent recorded a year before.