Euro area unemployment at record 12 percent

Published on NewsOK Modified: April 2, 2013 at 12:22 pm •  Published: April 2, 2013
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LONDON (AP) — The eurozone economy has passed another bleak milestone.

Official figures Tuesday showed that unemployment across the 17 European Union countries that use the euro has struck 12 percent for the first time since the currency was launched in 1999.

Eurostat, the EU's statistics office, said the rate in February was unchanged at the record high after January's figure was revised up to 12 percent from 11.9 percent.

Spain and Greece have mass unemployment and many other countries are seeing their numbers swell to uncomfortably high levels as governments across the region enact tough austerity measures to get a handle on their debts.

The eurozone, which is made up of a little more than 330 million people, is one of the world's major economic pillars and the turmoil surrounding it has been one of the main reasons why the global recovery has been muted.

A total of 19.07 million people were officially out of work in the eurozone in February, nearly two million more than the same month the year before. For the 27-country European Union, of which the eurozone is a large part, the unemployment rate was 10.9 percent.

"Such unacceptably high levels of unemployment are a tragedy for Europe and a signal of how serious a crisis some eurozone countries are now in," said EU Employment Commissioner Laszlo Andor.

Even though the eurozone has achieved another disappointing record, for the positively-inclined there was some comfort to be found.

The 33,000 increase in the number of unemployed in February was the smallest monthly rise since April 2011 and way down on the 222,000 recorded in January. And Germany, Europe's biggest economy, has an unemployment rate of only 5.4 percent. That's even better than the U.S. rate of 7.7 percent.

However, the February figures came before the recent Cyprus crisis.

The worry in the markets is that the chaos surrounding the country's bailout has reignited concerns over the euro and may have further dented confidence across the eurozone — a backdrop that's hardly conducive to job creation, economic recovery and stability across the eurozone.

"The economic and social consequences of high unemployment continue to represent one of the most significant threats to the future of the eurozone," said Marie Diron, senior economic adviser at Ernst & Young.

It's certainly a real threat to the immediate future of Cyprus.

Unemployment on the east Mediterranean island nation of barely a million people is expected to ratchet higher over the months ahead as the economy contracts sharply.