Eurozone unemployment hits all-time high

The number of people unemployed across the 17 eurozone nations has risen by 126,000 over a single month, taking the total number of unemployed to 16.6 million.

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013

This new data from Eurostat, tallying the number of people out of work as of October, shows a 0.1% increase on the previous month to 10.3%. More alarmingly, the 16.6 million jobless represents an all-time high for the euro era.

It's a pretty frightening time for the eurozone nations. Earlier this week, the OECD warned that recession was nigh. Now these unemployment figures have rubbed further salt in the wound.
What these figures don't take into account is the huge disparity between the jobless rates in different countries. Germany's labour market is positively buoyant: its unemployment rate has actually fallen from 5.7% in September to 5.5% in October, thanks in part to a boom in its industrial sector.

In Spain, it's a different story altogether. The number of people out of work hit 22.8% last month, while Italy’s unemployment rate rose to 8.5%.

All eyes are on the European Central Bank to see if the financial colossus will dip into its pockets to remedy the situation. 'The rise in unemployment confirms that the financial crisis is reaching the real economy,' says Jacques Cailloux, European economist at RBS. 'Additional policy support by the ECB is warranted.'

The eurozone may not have to wait too long for a lifeline. Next week, the ECB is expected to announce fresh support for struggling banks; three-year loans are mooted and a loosening of the collateral requirements needed to borrow money (slightly worrying given that banks lending against less-than-rock-solid assets is precisely what's gotten us into this mess).

The upshot of this will be that, in theory, banks will be able to lend to struggling businesses again. These, in turn, will be able to retain, if not take on, more staff. Or, more likely, the banks will use the money to plug holes in their finances and attempt to sit on the loans until the financial climate brightens.

For the moment, one thing is clear. If you're out of work, hotfoot to it to Deutschland.

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