Record Unemployment in the Eurozone

January 31, 2012

Comments

Via the BBC: Eurozone unemployment hits new record

The jobless rate in the 17 countries that use the single currency was 10.4% in December, unchanged from November’s figure which was revised up from 10.3%.

Some 16.5 million people were out of work in the eurozone in December, up 751,000 on the year before.

The highest unemployment rate remains in Spain (22.9%), while the lowest is in Austria (4.1%).

Unemployment has been rising throughout 2011, as the debt crisis in the region has continued. In December 2010, the unemployment rate in the euro area was 10%.

Unfortunately, the trend is currently in the wrong direction.

Overall EU unemployment (27 countries) is 9.9% in December.

6 responses to “Record Unemployment in the Eurozone”

superdestroyer

January 31, 2012 at 8:16 am

European countries are doing to have to find a way to have high taxes and high entitlements along with slow economic growth and high unemployment rates.

Also, as these countries continue to age (average age going up) unemployment, economic growth, and competing in the global economy will only get worse.
Brummagem Joe

January 31, 2012 at 8:25 am

This is largely the consequence of the collapse of real estate bubbles and/or the generally contractionary fiscal measures that European govt’s have taken in response to their sovereign debt problems some of which notably Ireland and Spain are the consequence of their housing bubble collapses. An unvirtuous circle. Europe of course is a big place and these one shoe fits all cloak widely differing circumstances within the Eurozone. There are signs that the enthusiasm for contractionary fiscal measures is losing appeal as European govts face up to the reality of its impact on growth and therefore employment.
Ben Wolf

January 31, 2012 at 8:50 am

If only someone had warned us that raising taxes and lowering spending reduces demand and creates unemployment. If only someone had, thirteen years ago, stated the lack of fiscal tranfer authority would result in financial leakage from importer nations to exporters, impoverishing their private sectors and forcing their governments to spend beynd their capacity to sustain.

If only the ECB would engage in quantitative easing now.
Hey Norm

January 31, 2012 at 9:27 am

How’s that austerity program working out for you Europe? If only our economic fortunes weren’t tied to the outcome in the Eurozone.
The ultimate tragedy is that our dysfunctional political system is incapable of looking at the evidence and recognizing that similar austerity measures here are never, ever, going to work. The evidence could not possibly be any more crystal clear…every month public sector job losses hold back net employment gains…and just last week we saw that cuts in Government spending were the biggest factor holding back the 2011 GDP numbers.
Yet we continue merrily on our way…whistling past the graveyard.
Save during the good times. Spend that, if you have to, in order to get through the rough patches. Why is it that the entire Republican party is unable to understand that very conservative rule of thumb?
JohnMcC

January 31, 2012 at 11:10 am

Paul Krugman is all over this. His blog today has a series of slides from a talk he will deliver in Paris this week illustrating the Euro-problem of austerity-caused stagnation.
Brummagem Joe

January 31, 2012 at 12:37 pm

@JohnMcC:

I’m not surprised since he’s been proved definitively right he’s doing a victory lap. Where he’s been proved most correct is in Britain which has the economy in Europe that looks most like ours. The Cameron/Osborne austerity program has produced a double dip recession. Q4 gdp was -0.2% and the latest BoE forecast for the whole of this year is +0.6%. And this is despite two rounds of QE by the bank. At the end of the day contractionary fiscal policy is…..er contractionary.