BRUSSELS (Reuters)—Unemployment has reached a new high in the euro zone and inflation remains well below the European Central Bank’s target, underscoring just how severe a challenge EU leaders face to revive the bloc’s sickly economy.
Joblessness in the 17-nation currency area rose to 12.2 percent in April, statistics agency Eurostat said on Friday, marking a new record since the data series began in 1995.
That deepening unemployment crisis is a threat to the social fabric of the euro zone, with almost two-thirds of young Greeks unable to find work exemplifying southern Europe’s threat of creating a ‘lost generation’.
Economists and policy makers have expressed concern that the greatest threat to the unity of the euro zone is now social breakdown from the crisis, rather than market-driven factors.
In France, Europe’s second largest economy, the number of jobless rose to a record in April, while in Italy, the unemployment rate hit its highest level in at least 36 years, with 40 percent of young people out of work.
Some economists expect the ECB, which meets on June 6, to act to revive the economy and go beyond another interest rate cut to consider a U.S.-style money printing program known as quantitative easing.
“We do not expect a strong recovery in the euro zone,” said Nick Matthews, a senior economist at Nomura International in London. “It puts pressure on the ECB to deliver even more conventional and non conventional measures.”
EU leaders meeting at the end of June in Brussels are expected to put the problem of joblessness at the forefront of their summit.
European Council President Herman Van Rompuy, who chairs the meetings, said last week youth unemployment was one of the most pressing issues for the 27-nation European Union as a whole.
In April, 5.6 million people under 25 were unemployed in the European Union, with 3.6 million of those in the euro zone.
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Portugal has the same problem!
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