Euro zone jobless hits highest level since birth of euro

BRUSSELS: Euro zone unemployment has risen to its highest level since the euro single cur rency was i ntroduced, data showed yesterday, a day after EU leaders promised to focus on creating millions of new j o b s t o t r y t o ki cks t a r t Europe’s floundering economy.

Seasonally adjusted unemployment among the 17 countries sharing the euro rose t o 1 0 . 4 percent i n December, o n a p a r wi t h a n u pwa r d l y revised November figure, the Euro p e a n Uni o n’s s t a t i s t i c s office Eurostat said.

It was the highest rate since June 1998, before the introduction of the euro in 1999.

“We’re looking at a fur ther i n c re a s e ove r t h e c o m i n g months, so that is worrying,” said Martin van Vliet, an economist at ING. “Look at Greece, where unemployment is some 20 percent, and it is 23 percent in Spain. At a certain point this could lead to political unrest.”

Af t e r t wo ye a r s o f a d e e p debt crisis and budget austerity, the number of Europeans out of work has risen to 16.5 million people, with another 2 0 , 0 0 0 p e o p l e wi t h o u t a j o b in December from the month before. The rate steadily crept u p t h r o u g h 2 0 1 1 a s g r o wt h stalled and recession loomed.

A t a s u mmi t o n Mo n d ay, Europe’s leaders tried to shift t he debate f rom f i ghti ng t he debt crisis to reviving g rowth in a bloc that produces 16 percent of global economic output.

They are looking to deploy 82 billion euros of unspent funds from the EU’S 2007-2013 budget in an attempt to boost employment . B u t mos t e c o n o mi s t s expect scant progress while the euro zone’s high debtors are compelled to persist with harsh austerity programmes.

A g rowing gap between the wealthy nations of nor ther n Europe and those of the poorer, less productive south overshadows any Eu-wide g rowth and jobs policies implemented from Brussels.

Ger many’s unemployment r at e f e l l t o 6 . 7 perc e nt i n January, s e parat e f i g ures showed, a new record low since figures for unified Ger many were first published.

Au s t r i a b o a s t e d t h e e u r o zone’s lowest jobless rate at 4.1 percent in December, followed by the Netherlands at 4.9 percent.

But unemployment in Spain reached a new high of 22.9 p e rc e n t i n N ove m b e r a n d D e c e m b e r. I n G r e e c e , joblessness was 19.2 percent for October, the latest data available. Unemployment reached 13.6 percent in Portugal in the final month of 2011.

“A b u d g e t a r y s t r a i t j a c k - et risks merely shrinking Europe’s economy and it will do nothing to ease the periphe r y ’s c o mpet i t ive n e s s p r o b - l e ms, t h e u n d e rl y i n g c a u s e of the sovereign crisis,” said T r e vo r Gre e t h a m, p o r t f o l i o ma n a g e r a t F i d e l i t y Mu l t i Asset Funds. “It starts and ends with jobs” High joblessness is a blight on the European economy, and youth unemployment is particularly problematic, particularly in Spain, where almost half of young people cannot find full-time work.

“For me this is the most painful aspect of the whole situat i on we’ re f aci ng i n Europe, t hi s g re at dive r g e nce on t he l a b o u r ma rk e t . B e c a u s e i f unemployment in Ger many is falling, we may see less preparedness to help out the rest of the euro zone,” Van Vliet said.

After years of falling unemployment, the 2008-2009 global financial crisis destroyed job creation prospects in Europe and the ensuing sovereign debt crisis has only worsened the outlook.

I n t he 2 7 - nat i o n European Union, the number of jobless has risen steadily from a recent low of 7.1 percent of the worki ng population i n 2 0 0 8 t o 9 . 9 percent in December -- some 23.6 million people.

E c o n o m i s t s s ay i t c o u l d reach 11 percent by mid-2012. “I t ’s very i mpor t ant t hat we don’t forget the growth and the jobs,” Danish Prime Minister Helle Thor ning-schimdt told reporters as she arrived at the half-day summit on Monday. “Everything star ts and ends wi t h g r owt h a n d j o b s, ” s h e said.

(Reuters)