Unemployment rises in Eurozone

17- NATION BLOC REGISTERS HIGHEST JOBLESS RATE IN DECEMBER

Euro- area jobless data this week will expose the social cost of last year’s debt crisis and recession on southern European economies as unemployment across the region probably rose to a record in December.

Unemployment in the 17- nation bloc climbed for a fifth month to 11.9 per cent, according to the median of 34 economists’s forecasts in a Bloomberg News survey.

That result due on February 1 would show the highest jobless rate since records began in 1995. By contrast, German unemployment data the day before may show the jobless rate there held steady for a fourth month at 6.9 per cent in January, a separate survey found.

Painful side- effects

While measures to stem the region’s debt turmoil have helped reduce sovereign bond yields from Spain to Greece, the recession and crisis have led to job cuts by companies and governments.

The European Central Bank predicts the currency bloc’s economy will shrink 0.3 per cent this year and President Mario Draghi said last week that the “jury is still out” on whether investor optimism can be reflected in economic momentum.

“The worst may be over for financial markets, but definitely not for the real economy,” Marco Valli, chief euro- area economist at UniCredit Global Research in Milan, said by telephone. “The unemployment situation is going to remain very poor at least for another year, if not longer.”

Spanish data last week showed a record 26 per cent of the workforce without jobs in the fourth quarter, bringing the total close to 6 million people. In Greece, the rate was even higher in October, at 26.8 per cent, also a record.