Eurozone unemployment hits record high of 12%
Unemployment across the 17 EU countries that use the euro has hit 12% for the first time since the currency was launched in 1999.
Eurostat, the EU’s statistics office, said the rate in February was unchanged and at the record high after January’s figure was revised up from 11.9% to 12%.
Over the month, 33,000 people in the eurozone joined the ranks of the unemployed. Spain and Greece continued to suffer from unemployment rates above 26%, and many other countries saw their figures increase to uncomfortable levels.
Germany, however, has an unemployment rate of just 5.4%, putting Europe‘s biggest economy in a better position that the US, where the rate is 7.7%.
The February figures came before the recent Cyprus crisis, which has reignited concerns over the future of the euro. Big depositors in the country’s two top banks face hefty losses under the terms of its bailout.
After Cyprus’s protracted and chaotic bailout discussions, during which the country’s banks closed for nearly two weeks, unemployment on the island is expected increase significantly over the coming months as the economy contracts sharply.
Many economists forecast that the Cypriot economy will shrink by 10% this year, and see unemployment rising to Greek and Spanish levels. In February, Cyprus’s unemployment stood at 14%.
Prior to the Cypriot crisis, there were signs that Europe’s debt crisis was easing. Stock and bond markets had risen, boosting confidence in countries’ ability to finance themselves. While markets have improved, however, the eurozone economy has sunk back into recession.
A closely watched survey released on Tuesday indicated that the recession probably continued in the first quarter. The monthly purchasing managers’ index (PMI) for the manufacturing sector, a gauge of business activity published by financial information company Markit, fell to a three-month low.
Though the PMI was not as bad as estimated, it fell to 46.8 points in March. Anything below 50 indicates economic contraction.
The major concern in the PMI survey was that manufacturing activity weakened across the eurozone, including Germany, Europe’s export powerhouse.