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Eurozone jobless rate up

Uwe HeßlerApril 2, 2012

Unemployment in the 17-nation currency area has reached its highest level since the introduction of the euro in 1999, as debt-wracked governments cut spending. With it grows the likelihood of recession in the EU.

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jobless people
Image: picture-alliance/dpa

Unemployment in the eurozone rose to 10.8 percent in February, the highest level in 15 years, the EU's statistics office Eurostat announced Monday.

Eurostat said the rise from January's 10.7 percent level was the eighth consecutive monthly increase, meaning that 17.1 million people were now out of work, nearly 1.5 million more than the same time a year ago.

Analysts said the new record was largely a result of austerity measures being introduced to fend off the debt crisis, and that unemployment was likely to move significantly higher.

"Soaring unemployment is clearly adding to pressure on household incomes from aggressive fiscal tightening in the region's periphery," Jenifer McKeown, senior economist at research firm Capital Economics, told the AFP news agency.

Unemployment in the 27-member European Union also rose in February, edging up to 10.2 percent from 10.1 percent in January.

Recession looming large

In 18 EU member states the jobless rate rose, while it fell in eight others and remained stable in Romania.

As in previous month, Spain reported the highest rate with 23.6 percent - including a staggering 50.5 percent of all young working people under the age of 25.

The lowest rates were reported by Austria (4.2 percent), the Netherlands (4.9 percent), Luxembourg (5.2 percent) and Germany (5.7 percent)

The unemployment gloom in Europe is compounded by fears of the continent being engulfed by a recession. Following a 0.3 percent contraction in the final quarter of 2011, UK-based research group Markit said its purchasing managers' index fell below 50 points in March, pointing towards shrinking economic activity.

"It looks odds-on that eurozone GDP contracted again in the first quarter… thereby moving into recession," Howard Archer, chief economist at IHS Global Insight, told AP news agency.

However, Germany looks set to escape a recession on the back of low unemployment and a nascent spring upturn providing additional impetus.

"Despite the contraction in fourth-quarter GDP, the German economy remains relatively resilient versus its eurozone peers," Annalisa Piazza, a Newedge Strategy analyst, told AFP.

uhe (AFP, AP, dpa)