Unemployment in the eurozone hit a record level in September. Joblessness in the 17-country bloc increased to 11.6 per cent in September compared with 11.5 per cent in August, and was significantly higher from a year earlier when the rate was 10.3 per cent, said Eurostat, the EU’s statistical office.
Deteriorating business confidence and worsening global demand forced 146,000 more people out of work in September compared with August, bringing the overall tally of unemployed to 18.5m – 2.2m more than a year ago.
Analysts expect unemployment to rise further, as several industrial groups suffer from declining orders, are forced to shut down operations and announce plans to shed thousands of jobs across the eurozone.
Youth unemployment – joblessness among under- 25s – rose to 23.3 per cent, up from 21 per cent during the same month a year ago. Unemployment among the ‘periphery’ eurozone members also touched new highs, with Spain’s jobless rate rising to 25.8 per cent in September. Unemployment in both France and Italy rose to 10.8 per cent.
The only respite came from Germany where unemployment was steady at 5.4 per cent and domestic retail sales rose 1.5 per cent, the fastest pace since June 2011.
But The Guardian’s economics editor, Larry Elliot, urged Europe’s leaders to act fast in order to avert economic and social disaster. He said the figures showed that Europe was locked into a double-dip recession that risks political extremism and the death of the social market ideal.
“Growth prospects are being strangled by a combination of rising unemployment, rockbottom consumer and business confidence, and budget cuts. The giant sucking sound is of Europe disappearing down its own self-imposed deflationary plughole.
“Is there an alternative? Of course there is, although it means European policymakers starting to act like the terrible Anglo-Saxons in Washington.
It means the ECB adopting a much more expansionary monetary policy. It means delaying co-ordinated fiscal tightening. And it means using the European Investment Bank as the vehicle for an infrastructure-led stimulus policy.
“The question is whether Europe’s policymakers have the flexibility and the imagination to change course. If they haven’t, the risk is of deepening economic distress, the fostering of political extremism and the replacement of the social market ideal with something far, far nastier.” Europe, he said, has a dark history when it comes to unemployment; before the Wall Street Crash of 1929, unemployment in Germany was around 5 per cent, by 1930 it was 15 per cent and by 1932 it was 30 per cent. “We all know what happened in 1933.”