ISSN 2330-717X

Eurozone Jobless Rate Hits New High


The jobless rate in the 17-nation euro currency bloc has hit a new high, but European leaders are voicing confidence that the continent’s two-year governmental debt crisis is nearing an end.

The European Union said Thursday that the eurozone’s unemployment rate hit 10.7 percent in January, the worst figure since the euro was first used 13 years ago. Once again, the highest jobless figures were recorded in the eurozone’s southern periphery, topped by a rate of more than 23 percent in Spain and nearly 20 percent in Greece, with much lower rates in northern Europe.

The adoption of austerity budgets throughout the eurozone countries has helped curb government deficits, but also placed new pressure on Europe’s workers and retirees as public jobs have been eliminated, while wages, pensions and spending on social programs have been cut.

In advance of a two-day EU summit in Brussels, EU president Herman Van Rompuy said the high unemployment and the austerity measures put “social cohesion at stake” and can also “damage the European idea itself.” He said Europe has to “tackle inequalities and poverty.”

Yet Rompuy also said he believes that while Europe’s governmental debt crisis is “not over,” the continent has “reached a turning point.” He said European leaders, set to sign a new treaty Friday giving the EU oversight of the budgets of individual countries, “must remain vigilant,” but that “everything we have done is now bearing fruit.”

Three eurozone countries have been forced to secure international bailouts — Greece twice and Ireland and Portugal once apiece — to finance their governments. Greece is still working on meeting the demands of its international creditors before receiving any funds from its new $173 billion bailout, its second in two years.

But the European Commission’s president, Jose Manuel Barroso, says he thinks the Athens government can recover.

“I know there are doubts outside Greece, and sometimes inside Greece, about the success of this program. But my question is the following – why shouldn’t Greece be able to do it? Why not? I believe Greece is perfectly able to make these efforts for structural reform. We have seen in other countries that this is possible, so Greece can, I’m sure, do it and I am sure that we, together, can make it successful.”

Interim Greek Prime Minister Lucas Papademos said the new bailout and elimination of more than half the debt Greece owes private lenders — a $142 billion reduction — will help his country regain a sound economic footing.

“The new economic programme that was recently adopted by Greece and voted (on) in the Greek parliament, the second financial package for Greece that was agreed upon in the Eurogroup last week, and also the private sector involvement in the refinancing of Greek sovereign debt are all very important steps that will improve the economic prospects for my country and they will also establish conditions that are conducive to higher and sustained growth. In particular, the new economic programme, as also President Barroso underlined, is comprehensive and appropriate and it includes a wide range of reforms, some of which are very bold and far reaching, that will improve efficiency both in the private sector and the public sector, will restore competitiveness, and therefore will foster higher sustained growth over the medium to long- term. However, in the short term the fiscal consolidation process and the shortage of liquidity have (had) adversely affected economic activity and employment and have had serious consequences on social welfare, as well as for the effective implementation of the programme. For this reason there is an urgent need to complement the policies and reforms included in the second economic programme for Greece with concrete measures and other actions that can have an immediate and positive impact on economic activity and employment, and also help address the social consequences of the adjustment process.”

Click here to have Eurasia Review's newsletter delivered via RSS, as an email newsletter, via mobile or on your personal news page.


The VOA is the Voice of America

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.