April 2, 2013
PARIS — While the euro zone has been transfixed lately by the Cyprus meltdown, another and potentially bigger European crisis has continued to simmer: record-high unemployment.
Spending cuts and tax increases aimed at trimming debt and addressing the financial crises in bailed-out euro zone countries, and the rising rate of joblessness in much of the currency bloc, “are feeding off of each other,” said Mark Cliffe, chief economist at ING Group.
“It’s a bit of a vicious circle,” he said. “Europe is pursuing a policy that is self-evidently failing.”
The euro zone jobless rate rose to 12.0 percent in the first two months of the year, the latest in a series of record highs tracing to late 2011, Eurostat, the statistical agency of theEuropean Union, reported Tuesday.
The agency revised upward the January jobless rate for the euro zone from the previously reported 11.9 percent, itself a record. For the overall European Union, Eurostat said the February jobless rate rose to 10.9 percent from 10.8 percent in January, with more than 26 million people without work across the 27-nation bloc.
Both the jobless rates and the number of unemployed are the highest Eurostat has recorded in data that reach back to 1995, before the creation of the euro.
Europe’s rising unemployment is in increasingly stark contrast to the jobs recovery in the United States, where unemployment in February declined to 7.7 percent, the lowest level since late 2008. The consensus among economists surveyed by Reuters is for the U.S. economy to show a gain of 200,000 jobs in March, after a gain of 236,000 in February. The labor data will be released Friday.