Euro zone employment falls

Fri, Jun 15, 2012, 01:00

The number of people in work in the euro zone fell again in the first three months of this year while imports of goods slid, highlighting the region's troubled economy that is increasingly reliant on exports to prevent an even deeper slump.

Data today also showed that Ireland had the third highest trade surplus in the euro zone, beaten only by Germany and the Netherlands.

Employment in the 17 nations sharing the euro fell 0.2 per cent in the first quarter from the fourth, marking the third straight quarter of falling job rates as the devastating impact of the region's debt crisis is felt in European households.

The European Union's statistics office Eurostat said today that the size of the working population shrank most in Greece, where it fell 8.7 per cent, followed by a drop of 3.7 per cent in Spain. But it rose slightly in France and Germany and underscored the divide between the north and the Mediterranean.

The euro zone's economy narrowly escaped recession in the first three months of this year, but the recovery that policymakers and economists expected has not materialised and a string of economic data points to a longer downturn.

Imports fell 0.1 per cent in April compared to the same month a year ago, Eurostat said, as fewer consumers bought cars and televisions. Adjusted for seasonal swings, imports fell 3 per cent in the month from March.

Exports continued to be a rare bright spot as foreign sales of German cars and machinery gave the euro zone a €5.2 billion trade surplus with the rest of the world in April, compared with a €4.5 billion deficit in April 2011.

Euro zone exports rose 6 per cent in the month compared to the same period in 2011.

But as the United States, Brazil and China feel the effects of the euro zone crisis and business confidence ebbs, exports from the euro zone fell 1.3 per cent in April from March, when adjusted for seasonal swings.

International demand remains the euro zone's best chance of a revival from its economic slump, but economists say a failure by EU leaders to resolve the debt crisis could begin to damage confidence in Germany's huge export sector that has so far been able to avoid the downturn and benefit from a weaker euro.

Germany accounts for about 40 per cent of the euro zone's exports and posted a €45 billion trade surplus in the first three months of the year, far surpassing any other euro zone nation.

The only other euro zone member to post more than €10 billion in surpluses were the Netherlands and Ireland, while France reported a €21.6 billion deficit.