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Europe – European unemployment reaches record high of 10.7%

02 March 2012

The Eurozone unemployment rate reached a record high of 10.7% in January 2012, this is up 0.7% from a year ago, according to data provided by Eurostat.

Eurostat estimates that around 24.325 million men and women in the 27 Member States were unemployed in January 2012, this means that unemployment rose by 1.488 million in the area.

A widening gap between North and South became particularly apparent as the lowest unemployment rates were recorded in Austria (4.0%), the Netherlands (5.0%) and Luxembourg (5.1%), and the highest in Spain (23.3%), Greece (19.9% in November 2011), and Portugal (both 14.8%). The Greek unemployment rate is 4 months out of date and could be even higher than Eurostat indicates.

Klaus Baader from Societe Generale told The Telegraph that the outlook was "deteriorating drastically" in the region. "Economic slowdown and fiscal austerity has hit the labour market much harder than previously thought."

However, there was also some good news. Compared with a year ago, the unemployment rate fell in ten Member States including Latvia (18.2% to 14.7% between the third quarters of 2010 and 2011), Lithuania (17.5% to 14.3% between the fourth quarters of 2010 and 2011) and Estonia (13.9% to 11.7% between the fourth quarters of 2010 and 2011). On the other hand, the highest increases were, once again, registered in Greece (14.1% to 19.9% between November 2010 and November 2011), Cyprus (6.3% to 9.6%) and Spain (20.6% to 23.3%).

The statistics also signify a worrying trend in high youth unemployment. In January 2012, 5.507 million young persons under 25 were unemployed in the 27 member states. Compared with January 2011, youth unemployment increased by 269,000 reaching a rate of 22.4%.

The Telegraph writes that the North-South divide indicates how difficult it is to run a “one-size-fits-all” monetary policy for the whole European bloc, and explains why northern leaders seem so nonchalant about the social crisis.

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