Unemployment in eurozone hits 11 year peak | Business | Economy and finance news from a German perspective | DW | 08.01.2010

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Unemployment in eurozone hits 11 year peak

The EU's statistics agency Eurostat says that the unemployment rate in the eurozone - the 16 nations that use the euro - is at its highest level since 1998. But it's not all bad news.

Empty factory

The job market got tougher in 2009

Latest figures from the EU statistics agency Eurostat show that the unemployment rate in the eurozone countries is currently running at 10 percent, its highest level since August 1998. In November last year, another 102,000 people lost their jobs, bringing the overall figure above 15 million.

Altogether, more than three million jobs were lost in the eurozone in 2009. The worst hit country was Spain, where unemployment is currently over 19 percent, while in Germany unemployment rose from 7.1 percent to 7.6 percent last year.

European Union President Herman Van Rompuy

EU President Van Rompuy is not overly optimistic

In all the 27 countries of the EU, some 23 million people are jobless, and the overall rate rose two points to 9.5 percent in 2009.

Some good news

However, there are indications that things could be improving. Eurostat also confirmed that the eurozone emerged from recession in the third quarter of 2009, with a 0.4 percent quarter-on-quarter growth after five quarters of falling output. The EU as a whole grew 0.3 percent compared with the previous quarter.

But EU president, Herman Van Rompuy, warned that the long-term economic outlook for Europe was "cloudy," and called for an annual growth rate of at least 2 percent of gross domestic product to keep pace with the rest of the world.

"The balance of power has shifted and Europe is more on the defensive now than it was a few years ago," Van Rompuy told reporters. Various EU leaders have emphasized the need to match the rise of emerging powers such as China.

Jose Luis Rodriguez Zapatero

Spain's Prime Minister Zapatero has called for new guidelines

Spanish prime minister, Jose Luis Rodriguez Zapatero, has suggested that the EU should set binding economic goals for member states under a 10-year plan to boost growth and competitiveness, and called for corrective measures for those countries that did not comply.

However, Spain along with Greece and Cyprus are the three eurozone countries still officially in recession.

Van Rompuy signalled his backing in principle for tough measures to boost recovery but made it clear that a decision could not be taken on such proposals until after they are discussed at a summit in Brussels on Feb. 11.

Spain proposed bringing together the heads of the 16 eurozone states to discuss economic policy, reviving an idea raised by France.

Editor: Tony Dunham

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