Eurozone Unemployment Hits Another Record High
However, measures such as reducing wages and pensions hit the labor force in the pocket and lower demand in the economy.
Other measures taken alongside the austerity, such as reforming labor practices, boosting skills and education, are intended to promote jobs but they take time, both to enact and to feed through an economy.
"We expect, however, that progress in structural reforms, especially those that improve the functioning of labor markets, will help lower unemployment and facilitate new employment opportunities," Mario Draghi, the president of the European Central Bank, said in a speech Friday in Paris.
Many economists think unemployment in many countries will carry on rising for months to come, certainly as long as the economies remain in recession. Draghi said Friday that he expects the recovery in the eurozone to start only in the second half of next year.Marie Diron, a senior economic adviser at Ernst & Young, forecasts unemployment will rise through 2013 and peak at a little under 20 million in the last quarter of the year. She laid out the hope that by then, those companies that have become "leaner and fitter" could fuel growth and start hiring again. "But before we reach that stage, there is unfortunately more pain to go through with high social costs," Diron said. The Commission's Todd said all EU countries should implement a new scheme â¿¿ to be officially proposed next week â¿¿ to help unemployed under 25 year olds. The scheme would ensure that, within four months of leaving school or becoming unemployed, a young person would be offered a job, further education, a traineeship or an apprenticeship. "This would extend to the whole of the EU existing good practice that exists in, for example, Austria, Finland and Sweden," Todd said. All three countries have below-average unemployment rates, and Austria actually has the lowest in the eurozone at 4.3 percent.
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