Youth unemployment in EU hits new high

Almost a quarter of those under age 25 out of work, from a fifth last year

The Straits Times, 1 Dec 2012

BRUSSELS - The young are bearing the brunt as unemployment soars in the euro zone amid a recession, official data shows.

Year-on-year figures from the Eurostat data agency yesterday showed almost one in four under the age of 25 out of work both in the 17-nation euro zone and the 27-nation European Union (EU) - against one in five a year earlier.

Compared with October last year, an extra 279,000 young people were out of work in the EU and 350,000 in the euro zone in October this year.

The youth unemployment rate rose to 23.9 per cent in the euro zone and to 23.4 per cent in the EU compared with 21.2 per cent and 21.9 per cent respectively a year earlier, Eurostat said.

But in Greece, 57 per cent of under-25s were jobless in August, the latest available figures, and in Spain, the figure was 55.9 per cent in October.

As the euro zone sinks into its second recession since 2009, the total number of people out of work in the euro zone rose by 173,000 people in October to almost 19 million people unemployed, Eurostat said.

That pushed joblessness to the highest level since the euro was introduced in 1999 - at 11.7 per cent of the working population from 11.6 per cent in September, illustrating the human impact of a public debt and banking crisis that has reverberated across the world.

Many economists blame jobless figures on the spending cuts implemented by almost all governments on the continent in the past three years to try to bring down their deficits that ballooned over the past decade.

Portugal, for instance, shed more than one in 20 public sector jobs in the first nine months of this year.

But in a shift in tone, the International Monetary Fund and the European Commission now say that they may have been too aggressive in pushing for government cutbacks. The commission is now advocating "growth-friendly fiscal consolidation".

Yet even the European Commission's forecast of 0.1 per cent growth next year looks optimistic and many banks, from Citigroup to Standard Chartered, expect the recession to continue and unemployment to keep rising.

There are also wide divergences in unemployment in the euro zone, with the jobless rate at around 4 per cent in Austria, 16 per cent in Portugal and above 25 per cent in Spain and Greece.

"The number of unemployed, which better captures the shorter-term dynamics, is showing little sign of abating," said JP Morgan economist Greg Fuzesi.

"Even with our expectation of a modest recovery next year, the unemployment rate could reach 12 per cent quite soon," he warned.

AGENCE FRANCE-PRESSE, REUTERS

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