Global Economics

European Job Losses Continue


Though unemployment in the 27 European Union member states stayed flat in March at 9.6%, some 123,000 people lost work, bringing the total to 23 million

Unemployment in the EU27 remained at its decade-high level of 9.6 percent in March, the same as the previous month, although a further 123,000 citizens lost their jobs compared to the previous month. The bloc's unemployed now number over 23 million.

The new figures released on Friday (30 April) by the EU's statistics agency, Eurostat, showed marked differences between member states. The Netherlands and Austria take up one end of the unemployment spectrum on 4.1 percent and 4.9 percent, respectively. At the other end of the scale, Latvia and Spain are on 22.3 percent and 19.1 percent.

Compared to one year ago, only Germany has seen employment levels rise, with the government offering subsidies to companies putting workers on shorter hours rather than laying them off directly. The other 26 EU member states witnessed a fall in employment levels.

German annual unemployment fell from 7.4 percent to 7.3 percent, with the highest increases seen in Latvia, where joblessness jumped from 14.3 percent to 22.3 percent over the same period.

The head of the European Trade Union Confederation (ETUC), John Monks, said youth employment was a particular concern.

"There is a real risk of seeing a lost generation," he said in a monthly newsletter. "The trade union movement is convinced that youth employment must be the priority of any European recovery plan."

Social security review

The fresh data come a day before new regulations on social security co-ordination in the European Union are set to enter into force, intended to make it easier for people to move to other European countries to work.

As a result, jobseekers who decide to look for work in another EU country will continue to receive unemployment benefits for a minimum of three months, extendable to six months.

European Commission employment spokeswoman Cristina Arigho said: "It's important to note that the new regulation does not create any new entitlements but it guarantees rights in areas such as health, unemployment, insurance, pensions and family benefits."

Under the plans, member states will increasingly exchange social security information over the next two years.

Inflation

Inflation, another factor determining the spending power of euro area citizens, rose in April to 1.5 percent according to a flash estimate from Eurostat, compared to 1.4 percent the month before.

The governing board of the European Central Bank will discuss the subject when they meet next week, but further interest rate rises are not expected.

Analysts said rising inflation was not a danger for the currency zone which is more preoccupied with the current debt crisis in Greece.

"Today's inflation number should be no reason to be concerned," said ING senior economist Carsten Brzeski in a note.

"Risks to price stability over the medium-term are still hard to find. For the time being, deflation rather than inflation should continue to be the ECB's main worry in the coming months," he added.

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