Eurozone Unemployment Update

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It’s that time of the month again, when the Eurostats Agency releases the latest unemployment figures for the Eurozone. The figures, which relate to February of this year, show a marginal improvement in the overall unemployment rate, which has now dipped to 11.9%. This means that 18.96 million people remain unemployed across the region, a drop of 34,000 from January levels and a promising 166,000 less than at this time last year.

The headline statistics tell only a fraction of the full story and rather over-simplify the complexity of the unemployment situation in the Eurozone. In some countries – Austria, Germany and Luxembourg – the unemployment rate is considerably lower than the Eurozone average, while in Spain and Greece the opposite is true. A gulf in employment generation has opened up and is threatening to create a two-speed Eurozone.

Increases in unemployment have been most marked in Cyprus, which is perhaps unsurprising given recent economic turmoil on the island, and in the Netherlands, which is surprising given its status as one of Europe’s healthiest economies. Hope for future economic recovery is offered by Portugal and Ireland where employment levels have bounced back in the wake of their respective bailouts.

Youth Unemployment rates – which often buck overall trends – have also fallen. Figures for February show that it stands at 23.5% – a whole 0.1% lower than January. As with overall unemployment rates there is huge disparity between youth unemployment levels across Eurozone countries. The difference between the rate in Germany and the rate in Greece is more than 50 percentage points!

Overall, that the situation is not dramatically worsening is definitely a plus point and furthermore there are some signs that one or two countries have turned something of a corner. On the other hand, the dug in nature of unemployment in Spain and Greece is cause for a lot of concern. Another negative is the massive difference between youth unemployment and overall unemployment rates. This phenomenon, which predates the financial crisis, seems to be an inbuilt feature of the economic system and is something that desperately needs to be tackled. If we can do so, we will have gone at least some of the way toward building a brighter tomorrow.

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