Eurozone joblessness at record

Published on 02/10/2012 00:00

Unemployment across the eurozone remained at its record high of 11.4 per cent in August, renewing concerns that efforts to slash debts have sacrificed jobs.

While European leaders have managed to calm financial markets in recent months with promises to cut spending and build a tighter union, they have failed to halt the rising tide of joblessness.

In August, 34,000 more people lost their jobs in the eurozone, according to the European statistics agency, Eurostat. The unemployment rate – the highest since the euro was created in 1999 – is the same as July.

Economists note that the very spending cuts that are intended to ease the financial crisis by lowering public debt are pushing unemployment higher and threatening the continent with recession. Some experts urge leaders to instead loosen spending to encourage growth.

Many European countries – like Greece, Spain and Italy – have very little room for such a stimulus.

Other economists say that the labour market reforms these countries are pushing through will eventually get them back on the path to economic growth. The question is merely how bad it will get before that happens - and whether the governments will be able to stay the course in the face of widespread popular protests.