Eurozone Unemployment Rate Hits Record High: 19 Million Now Jobless

The eurozone’s unemployment rate rose to a record high of 12.0 percent in the first two months of the year, with 33,000 additional people joining the ranks of the jobless, according to the European Union’s statistical agency Eurostat on Tuesday.

Not surprisingly, Greece had the highest unemployment rate among the 17-nation bloc at 26.4 percent, while Spain came in at a close second at 26.3 percent. Austria (4.8 percent) and Germany (5.4 percent) on the other hand were the lowest in the region and saw their figures remained unchanged from January.

The eurozone’s unemployment rate rose to a record high of 12.0 percent in the first two months of the year, with 33,000 additional people joining the ranks of the jobless, according to the European Union’s statistical agency Eurostat on Tuesday.

Not surprisingly, Greece had the highest unemployment rate among the 17-nation bloc at 26.4 percent, while Spain came in at a close second at 26.3 percent. Austria (4.8 percent) and Germany (5.4 percent) on the other hand were the lowest in the region and saw their figures remained unchanged from January.

In total 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. More worryingly though was the rise of youth unemployment, with nearly a quarter of Europe’s youth (23.5 percent) not working

The EU described the latest level of unemployment across the eurozone as “unacceptable”.

“Such unacceptably high levels of unemployment are a tragedy for Europe,” a spokeswoman for EU Employment Commissioner Laszlo Andor said, as cited by Sky News.

[quote]”The EU has to mobilise all available resources to create jobs … young people in particular need help,” she added.[/quote]

However analysts predicted that the eurozone’s overall unemployment figure could rise even further in the near future, particularly with the fallout caused from the Cyprus bailout.

According to Mark Cliffe, chief economist at ING Group, in an interview with the New York Times, Cyprus’s jobless rate, at 14.0 percent currently, is almost certain to rise because of the impending contraction in the Cyprus economy.

[quote]“We’ve already seen how this story plays out in Greece. We’re about to see it play out again in Cyprus,” he said.[/quote]

Spending cuts and tax increases aimed at trimming debt and addressing the financial crises in bailed-out euro zone countries, and the rising rate of joblessness in much of the currency bloc, “are feeding off of each other,” added Cliff, warning that “Europe is pursuing a policy that is self-evidently failing.”

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Compared to a year earlier, the increase in registered unemployment was 1.78 million in the eurozone and 1.81 million in the EU, Eurostat noted. Compounding the problem was a decrease in manufacturing activity – as tracked by Markit’s Purchasing Managers Index (PMI) – which fell to a 3-month low of 46.8 in March. Any score below 50 indicates a contraction in the sector.

“The surveys paint a very disappointing picture across the region,” said Markit’s chief economist Chris Williamson to the BBC.

“The manufacturing sector looks likely to have acted as a drag on the economy in the first quarter, with an acceleration in the rate of decline in March raising the risk that the downturn may also intensify in the second quarter.”

French President Francois Hollande last week once again called on Europe’s leaders to reverse nearly three years of austerity policies.

[quote]”Prolonging austerity today risks not achieving a reduction in deficits but the certainty of making governments unpopular so that populists will swallow them whole when the time comes,” he said.[/quote]

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“The surge in joblessness coupled with this morning’s grim PMI surveys [manufacturing surveys] are a glaring example of the extent to which market sentiment towards the eurozone has become detached from economic fundamentals,” added Nicholas Spiro of Spiro Sovereign Strategy. “The disconnect is most pronounced in Spain and Italy but is also manifest in France.”

The latest unemployment figure is the 22^nd month in a row that the eurozone’s jobless rate has seen a rise. According to Reuters, the dire social impact of Europe’s economic situation may give an impetus for the European Central Bank to cut interest rates when central bank governors meet on Thursday.