EU EXPERIENCING INCREASE IN UNEMPLOYMENT
European unemployment rose in July, data released Tuesday showed, despite signs that the recession was starting to loosen its grip on the region’s economy. Unemployment in the 16-member eurozone hit a more-than 10-year high in July, Europe’s statistics office Eurostat reported. The numbers of the out of work in the broader 27-member European Union (EU) edged up to 9.0 per cent in July, compared with 8.9 per cent in June.
EU unemployment came in at 7.0 per cent in July 2008.
At 18.5 per cent, Spain had the highest unemployment rate in the EU in July, with Latvia (17.4 per cent) and Lithuania (16.7 per cent) a close second and third.
Tuesday’s figures showed that another 167,000 people became unemployed in the eurozone during July, pushing the jobless rate in the currency bloc up to 9.5 per cent, from 9.4 per cent June. Eurozone unemployment stood at 7.5 per cent in July 2008.
Governments across Europe have been rolling out big fiscal stimulus packages in a bid to shield their economies from the global economic downturn and shore up their labour markets.
State-subsidized short-term labour contracts in nations such as Germany have also helped employers to avoid making mass layoffs as economic demand contracted this year. “As unemployment tends to lag behind developments in the wider economy, we still expect to see further increases in the coming quarters, particularly as incentives for German firms to maintain workers for shorter hours start to expire,” said Jennifer McKeown European economist with the economics research group Capital Economics.
At the beginning of the year, the numbers jumped by more than 500,000 as the global recession tightened its grip on the currency bloc’s economy.
However, more recently key economic indicators have pointed to growth in Europe gaining traction in the run-up to the end of the year with two of the region’s two biggest economies - Germany and France - emerging from recession during the second quarter.