David Martin's EU Tribune

News is coming in that the economic crisis in the EU is having dire effects on working people with unemployment rising to a new high – and it is affecting the young worst of all..
Unemployment in the eurozone rose to a new record level in May, while the number of young people out of work has increased by more than a quarter of a million over the last year, new figures published today revealed.

According to Eurostat, unemployment across the 17 euro area countries was 11.1 per cent in May, the highest rate since the introduction of the single currency and up from 11 per cent the previous month. It means there were 17.56 million people out of work in the eurozone in May, a rise of 88,000 compared with April.

The divergence across the region was marked, with unemployment highest in Spain and Greece at 24.6 per cent and 21.9 per cent respectively and lowest in Austria at 4.1 per cent.
Among under-25s unemployment reached 22.6 per cent – or 3.4 million people – up from 20.5 per cent in April.

The figure has risen by 254,000 in the past 12 months. Again the highest rates were in Greece and Spain, where just over half of young people were out of work. Youth unemployment was lowest in Germany, at 7.9 per cent.

An eminent EU economist is reported as saying: ‘With the eurozone having suffered appreciable gross domestic product contraction in the second quarter and in grave danger of contracting again in the third, and with eurozone business confidence generally low and fragile, the likelihood is that the eurozone unemployment rate will move significantly higher over the coming months.’

Meanwhile in the wider European Union unemployment was also up, from 10.2 per cent in April to 10.3 per cent in May, an increase of 151,000 people. It means there were 24.86 million people out of work across the 27-nation bloc. Youth unemployment in the EU was 22.7 per cent.

Compounding the bad news for the eurozone, Markit’s Purchasing Mangers’ Index survey for the manufacturing sector remained at 45.1 in June, it was announced today. Any figure below 50 represents a contraction. Markit economist Chris Williamson said: ‘Companies are clearly preparing for worse to come, cutting back in both staff numbers and stocks of raw materials at the fastest rates for two-and-half-years.’

It is time to stop the cruel failed austerity measures and get back to well tested Keynesian economics of investing in jobs.