The bad news for Europe just keeps coming today with the region posting its highest unemployment figure on record, increasing fears that Europe is on the cusp of sliding into a deep recession that could impact heavily on the rest of the global economy.
Unemployment hit a fresh high of 18.2 million in August according to the European Union’s statistics office in Luxembourg. It is the highest figure since records began in 1995 and met economists’ forecasts. The figure is up by 34,000 from the previous month marking a total of 11.4% of the Eurozone’s population is out of work.
“There is simply not enough growth in the euro region to create sufficient jobs and the unemployment rate still has not reached its peak,” said Thomas Costerg, an economist at Standard Chartered Bank. “A worrying trend is that the number of unemployed is now also expanding in core countries like Germany, which had been rather sheltered up to now.”
As expected the highest unemployment rates were recorded in Greece and Spain, where each posted a figure of over 25%. Over a quarter of their potential workforce is now unemployed. Youth unemployment remains alarmingly high with the regions figure rising yet again to 22.8%. In Spain and Greece the figures are shocking. 53.9% of young people under the age of 25 are out of work in Spain and over 50% in Greece.
Critics of austerity seem to be justified as it is the policies of those two nations’ governments that have caused the massive figures. Both nations are slashing their spending and hiking up taxes in a bid to meet the terms of bailout agreements or in an effort to restore confidence among international investors. The combination of spending cuts and increases in taxes has inflicted a large amount of hardship on the citizens of those nations and as a result a winter of violent protest is feared this year.
“An end to the horror is not in sight,” said Carsten Brzeski, senior European economist at ING Group in Brussels. “Unemployment rates are still increasing and look set to increase further. It is no longer an exclusive peripheral problem as labour markets in core countries are also weakening. All of this could make unemployment the next big issue of the euro-zone crisis management, making calls for more Euro-zone solidarity louder.”
The Pound to Euro exchange rate is currently trading at 1.2523
The Pound to US Dollar exchange rate is currently trading at 1.6152
The Pound to Australian Dollar exchange rate is currently trading at 1.5575
The Euro to US Dollar exchange rate is currently trading at 1.2898
The Euro to Pound exchange rate is currently trading at 0.7986
The Exchange rates are provided by TorFX a leading foreign exchange broker, offering excellent exchange rates for all your currency needs.