Eurozone Unemployment Rises To New Record
Once again, Spain held the ignominious position of having the highest unemployment rate in the eurozone, at 25.8 percent. Greece may yet surpass that â¿¿ its unemployment rate mushroomed to 25.1 percent in July, the latest available figure, and is due to increase in the face of what many economists are calling an economic depression. The country is forecast to enter its sixth year of recession next year.
Both countries, which are at the heart of Europe's three-year debt crisis, have youth unemployment above 50 percent. That risks creating a lost generation of workers and is straining the countries' social fabric. Extremist political groups in Greece and regional separatist parties in Spain have grown in popularity as the economy worsened.
Concern over the social impact of unemployment has also weakened governments and hobbled political decision-making.
In Greece, the three parties in the coalition government have tried for months to agree on an austerity package that is necessary for the release of bailout loans to prevent the country's bankruptcy.The lowest unemployment rate in the eurozone was Austria's 4.4 percent. Germany, Europe's biggest economy, has a jobless rate of only 5.4 percent. Separately, Eurostat reported that inflation in the eurozone fell modestly to 2.5 percent in the year to October, from the previous month's 2.6 percent. Inflation is still above the European Central Bank's target of keeping price rises just below 2 percent. "High and rising unemployment, and relatively sticky inflation, does not bode well for consumer spending across the eurozone, especially as consumers in many countries are also facing muted wage growth and tighter fiscal policy," said Howard Archer, chief European economist at IHS Global Insight. Above-target inflation has not prevented the ECB cutting its key interest rate to a record low of 0.75 percent, but few economists think financially strained consumers will get any more help from the bank at next week's monthly policy meeting.
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