Euro zone employment falls
Some 19 million people currently unemployed in the bloc
Job seekers wait to speak to representatives of employers at a job fair. Photo: Getty Images
The euro zone’s stagnant economy failed to generate jobs at the end of last year despite increased business during the Christmas shopping season, showing the challenges facing euro zone leaders trying to reduce record unemployment.
Employment in the single currency area fell 0.3 per cent in the last three months of 2012 from the previous quarter, the fourth consecutive quarterly fall in the job creation rate, the EU’s statistics agency Eu rostat said today.
The shrinking size of the working population was most pronounced in Spain, where the job rate dropped 1.4 per cent in the fourth quarter.
Of the euro zone's major economies, only Germany could manage an increase in employment creation, highlighting the divide between the bloc’s biggest economy and the rest of its members.
Euro zone leaders gather in Brussels for a two-day summit today in a hunt for economic growth that has eluded them since the single currency area stagnated in late 2011.
The economy is not expected to recover until 2014, and some 19 million people are unemployed in the bloc, or about 12 per cent of the working population.
Many economists expect the ECB to cut its main lending rate to below 0.75 per cent in 2013 to try to revive the economy, but with the cost of borrowing already at a record low, such a move may not have much of an impact.
“A further rise in unemployment in the short term, and only a slow decline from 2014 is likely to be an impediment to growth,” Marie Diron, an economist at Ernst and Young, said in a new report on the euro zone's economy.
“Even with recovery, the number of people out of work across Europe will remain stubbornly high. By the end of 2017, we estimate the unemployment rate will remain above 11 percent,” she said.