Unemployment rises in eurozone, falls in US
LONDON PRESSURE is growing on Europe’s leaders to focus less on austerity and more on stimulating growth as the 17 countries that use the euro face record high unemployment and a recession that is spreading across the region.
Eurozone unemployment rose by 169,000 in March, official figures showed Wednesday, taking the rate up to 10.9 percent its highest level since the euro was launched in 1999.
The seasonally adjusted rate was up from 10.8 percent in February and 9.9 percent a year ago and contrasts sharply with the picture in the US, where unemployment has fallen from 9.1 percent in August to 8.2 percent in March.
Economies across the eurozone are contracting as governments enact austerity measures spending cuts and higher taxes to reduce their budget deficits and slow the growth of their debts. Eight eurozone countries including Greece, Spain and the Netherlands have seen their economies shrink for two straight quarters or more, the common definition of a recession.
Austerity has been the main prescription across Europe for dealing with a debt crisis that’s afflicted the continent for nearly three years and has raised the specter of the breakup of the single currency. Three countries Greece, Ireland and Portugal have already required bailouts because of unsustainable levels of debt.
Bailout fears have intensified in recent months as Spain, Italy and other governments face rising borrowing costs on bond markets, a sign that investors are nervous about the size of their debts relative to their economic output. Austerity is intended to address this nervousness by reducing a government’s borrowing needs, but there has been a negative side effect: as economic output shrinks, the debt burden actually looks worse.