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Sunday, 4 March 2012

European Unemployment keeps rising in January: to 10.7% for the Euro-zone and 10.1% for the whole European Union.

Last Thursday was the monthly presentation of the European unemployment data by Eurostat, the European statistical agency.

With 10.7%, the Euro-zone’s unemployment rose by 0.1% from 10.6% in December 2012. The December rate itself had been adjusted by 0.2% from 10.4%. The unemployment in the whole European Union increased to 10.1% from 10.0% in December 2012. The December rate had also been adjusted by 0.1% from 9.9%.

Here are the pertinent snips of the press release of Eurostat:

January 2012
EU27 at 10.1%

The  euro area (EA17) seasonally-adjusted unemployment rate was 10.7% in January 2012, compared with 10.6% in December 2011. It was 10.0% in January 2011. The EU27 unemployment rate was 10.1% in January 2012, compared with 10.0% in December 2011. It was 9.5% in January 2011.

Eurostat estimates that 24.325 million men and women in the EU27, of whom 16.925 million were in the euro area, were unemployed in January 2012. Compared with December 2011, the number of persons unemployed increased by 191 000 in the EU27 and by 185 000 in the euro area. Compared with January 2011, unemployment rose by
1.488 million in the EU27 and by 1.221 million in the euro area.

Among the Member States, the lowest unemployment rates were recorded in Austria (4.0%), the  Netherlands (5.0%) and Luxembourg (5.1%), and the highest in Spain (23.3%), Greece (19.9% in November 2011), Ireland and Portugal (both 14.8%). 

Compared with a year ago, the unemployment rate fell in ten Member States, remained unchanged in two and rose in fifteen Member States. The largest falls were observed in Latvia (18.2% to 14.7% between the third quarters of 2010 and 2011), Lithuania (17.5% to 14.3% between the fourth quarters of 2010 and 2011) and Estonia (13.9% to 11.7% between the fourth quarters of 2010 and 2011). The highest increases were registered in Greece (14.1% to 19.9% between November 2010 and November 2011), Cyprus (6.3% to 9.6%) and Spain (20.6% to 23.3%).

In January 2012, the youth unemployment rate was 22.4% in the EU27 and 21.6% in the euro area. In January 2011 it was 21.1% and 20.6% respectively. The lowest rates were observed in Germany (7.8%),  Austria  (8.9%) and the  Netherlands  (9.0%), and the highest in  Spain (49.9%),  Greece (48.1% in November 2011) and Slovakia (36.0%).

Unemployment rates in January 2012, seasonally adjusted
Data courtesy of Eurostat
Click to enlarge

All in all these are exactly the double dip unemployment figures that you expect from a European Union that looks at the European credit crisis with financial blinders on, totally ignoring the economic component of the crisis. 

The only European leader that has been clearly mentioning the economic component during the last months, is PM David Cameron of the UK. Although I'm not in favor of the political choices that he made lately, I must give him a tip of the hat for that insight.

The rest of the European countries has been on the tight leash of the Merkel/ Schäuble and Rutte / De Jager quartet, directed by Finnish Euro-commissioner Olli Rehn. These were clearly the guys that were holding the wallet and therefore nobody dared to protest to them. Although the French leadership is often well-known for whistling a different tune than Germany (or in fact, anybody else), the resistance of Nicolas Sarkozy is futile in these days.

The consequences of this financial tunnel vision are very clear: The PIIGS get in more economic trouble per month, with their economies contracting and unemployment rising steadily. At this moment even (arguably) the strongest and most export-driven economies of the Euro-zone (i.e. Germany and The Netherlands) start to feel the consequences of their narrow-minded policy. 

However, even in these trying times, there have been a few white ravens under the European countries: Austria, Romania, and Slovakia all reported an unemployment figure that was lower in January 2012 than in December 2011. 

Respectively 4.4% from 4.6% (Austria), 6.6% from 7.0% (Romania) and 13.0% from 13.2% (Slovakia). Remember, it could very well be that these figures are subject to adjustments in the coming month. 

The following countries kept the unemployment at the same level: Denmark, Hungary, Malta, Poland, Slovenia and Finland. 

Although the unemployment situation in the Baltic states seemed to have improved during 2011, there is no new unemployment data available, that is not at least three months old. Therefore the unemployment situation in these countries needs to be watched with caution. Especially as 2011Q4 has been the quarter where the stronger economies in Europe starter to feel the pain of the approaching double dip.

Even when there were three countries with slightly better unemployment data and six with stable data, the general trend of Europe is towards (much) more unemployment. 

Therefore the conclusion of these unemployment figures must be in my opinion: if the European Union doesn’t abolish its mindless, German/Dutch financial tunnel vision and focuses more on the economy in the Euro-zone, the financial battle may have been won in the future, but the economic war will definitely have been lost. And that’s a terrible tragedy for a continent that was aiming to be the most competitive region in the world only a few years ago.

1 comment:

  1. Check out this infographic comparing EU wages vs EU unemployment rates