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Nikos Chrysoloras: Europe risks losing an entire generation

Unemployment in the Eurozone remained at the alarming level of 12% throughout February, thus remaining stable compared to the previous month, which however, was higher by 1.1% compared to the corresponding month of the previous year. In EU-27, unemployment rose to 10.9% in February, i.e. an increase of 0.1% compared to the previous month and 0.7% compared to February 2012. The above data were published by Eurostat on Tuesday, April 2, although they did not include the corresponding updated estimates for Greece. The most recent month for which there are available data regarding unemployment in Greece, is December 2012. With unemployment in December at 26.4%, Greece has secured the dismal first place in Europe. Moreover, Greece exhibits the largest increase in unemployment on an annual basis (+5%), as well as the highest unemployment rates among young people (58.4%) and women (29.3%), based on the data of December.

An overall 19.071 million people are unemployed in the Eurozone and 26.338 million in the EU-27. Compared to February 2012, unemployment rose in Eurozone by 1.775 million people and by 1.805 million in the EU as a whole. Nearly six million people below 25 years of age are unemployed in Europe, of which three and a half million belong to the Eurozone. In terms of individual groups, youth unemployment in the Eurozone reached 23.9% in February, whereas another 12.0% were women and 11.9% men. Only eight out of 27 EU member-states showed decline in unemployment in relation to February 2012, with the most notable improvements observed in the Baltic countries, as well as in Ireland, where unemployment decreased from 15.1% to 14.2%. Apart from Ireland, however, trends in unemployment are alarming in other countries where financial support programmes are implemented: the unemployment rate in Portugal is 17.5% (from 14.8% last year), in Spain 26.3% (from 23.9% last year), in Cyprus 14% (from 10.2% last year). If we were to compare Europe with the U.S.A., where unemployment is 7.7%, or Japan, where unemployment is even lower (4.2%), the picture that emerges is rather disappointing.

It is also worth noting that the Eurostat data are indicative of the vast differences between the European North and South, whereby unemployment in Greece and Spain exceeds 26%, whereas in Austria (4.8%), Germany (5.4%), Luxemburg (5.5%) and the Netherlands (6.2%), unemployment remains at exceptionally low levels. Nevertheless, given that recession has now started to affect the core of the Eurozone, with economies such as those of the Netherlands and Germany remaining stagnant, it is almost certain that unemployment will rise in those countries as well. According to the latest report by the OECD, the European economy is not projected to start recovering substantially before the end of 2013, whereas the European GDP remains essentially “trapped” at low levels since the second semester of 2011, which are much lower than those of 2008. The inability to recover from the “shock” of 2008 has led many analysts to characterize the current period as the “Great Stagnation”, in an analogy to the “Great Depression” of the 1930’s. Since stagnation is bound to continue and unemployment to increase further, a whole generation of young Europeans is in danger of being “lost”, due to its long absence from the labour market.