Eurozone unemployment rate hits record high
Unemployment in the eurozone touched a fresh high in April, fuelling fears that the deepening jobs crisis threatens the social fabric of the currency bloc.
Youth unemployment is raising the spectre of a lost generation in Europe. Photo: Reuters
By Rachel Cooper, and agencies
5:50PM BST 31 May 2013
According to figures from Eurostat, the jobless rate ticked up to 12.2pc in April from 12.1pc in March, with the statistics office estimating that 19.4m people in the eurozone were unemployed in April.
The highest increases were registered in Greece, Cyprus, Spain and Portugal. Separately on Friday, data showed that Italy's jobless rate reached a 36-year high in April of 11.9pc.
Those figures came as protestors from the so-called "Blockupy" anti-capitalism movement surrounded the European Central Bank in Frankfurt, where they are protesting against ECB debt policy, food price speculation and poor labour practices in the clothing industry.
Fears that Europe is facing a 'lost generation' were underlined by the youth unemployment rate standing at 24.4pc in the eurozone during April. Almost two-thirds of youngsters are unemployed in Greece while more than half are jobless in Spain.
Source: Eurostat
After three years of austerity policies to tackle Europe's economic crisis, some politicians have warned that cost-cutting measures which raise unemployment could result in the rise of populist governments.
Earlier this year, the European Commission warned that "unacceptably high" unemployment threatens "grave social consequences" and this week, it told governments that they must focus on reforms to outdated labour and pension systems to revive the region.
However, even if governments take on powerful unions to enact reforms, they will take time to bear fruit and lessen the impact of the eurozone's debt and banking crises that have been sapping confidence from households and businesses.
Last week, Germany and France launched a 'New Deal' to tackle the mass youth unemployment gripping Europe, freeing up EU resources to pay for language courses and fund jobseekers' flights around the continent in search of work.
In France, Europe's second-largest economy behind Germany, unemployment rose to a record in April while in Germany itself, the jobless rate stands at 5.4pc.
With unemployment accelerating and the recession persisting, expectations are rising for the European Central Bank to revive the economy and go beyond another interest rate cut to consider a US-style quantitative easing programme.
But the fact that consumer price inflation stood at 1.4pc in May - stubbornly below the ECB's 2pc target - underlines the scale of the challenge facing European leaders.
"Even if the eurozone economy exits from recession later this year, the labour market is likely to remain in recession until next year," said Martin van Vliet of ING.
