1 August 2012The number of people unemployed across the 17 countries that use the euro hit a record high in June, official figures showed Tuesday, in a stark reminder that Europe’s debt crisis has ramifications beyond the financial markets.
Eurostat, the EU’s statistics office, said 17.801 million people were out of work in the eurozone in June. That was 123,000 more than May, and is the highest level since the euro was formed in 1999. The increase was the 14th in a row and means that around 2.25 million people have lost their jobs since April 2011.
Despite the increase, unemployment on a seasonally-adjusted basis in June was unchanged at a record 11.2 percent, nearly three percentage points higher than the U.S.’s equivalent 8.2 percent. Europe’s unemployment rate for May had originally been estimated at 11.1 percent.
“Another horrible set of labor market data for the eurozone, which bodes ill for consumer spending and growth prospects,” said Howard Archer, chief European economist at IHS Global Insight.
Spain, which is at the forefront of Europe’s debt crisis concerns, had the highest unemployment rate across the eurozone of 24.8 percent. Greece’s rate was not far behind at 22.5 percent, though the latest figures available are for April.
Many countries that use the euro, including France and Italy, also have double-digit unemployment rates.Germany, Europe’s biggest economy, continues to fare far better, and its unemployment rate, according to Eurostat, dropped to 5.4 percent in June from 5.5 percent in May.
Germany may be hit soon
However, analysts think that even Germany will soon start to see rising unemployment rates. Figures earlier from Germany’s Federal Labor Agency showed the unadjusted rate climbing from 6.6 percent in June to 6.8 percent in July as the typical seasonal increase of school-leavers signing on for unemployment benefits was reinforced by a gradual slowing in the labor market. The figures will add to the pressure on policymakers to get a grip of the debt crisis, which is impacting communities and consigning large chunks of younger people to unemployment - every other person aged under 25 in Spain and Greece is unemployed.
Hopes have risen over the past week that Europe is preparing new measures to handle the crisis. Last week, European Central Bank president Mario Draghi said the bank “is ready to do what it takes to preserve the euro.”