Greek jobless tragedy deepens as eurozone interest rates stay put

The European Central Bank has decided to keep eurozone interest rates where they are, but Greece's unemployment rate has now soared to the largest in the EU.

by Michael Northcott
Last Updated: 19 Aug 2013

It’s been a while since we’ve heard any doom and gloom tales from the continent, but today it emerged that Greece now has an unemployment rate of 26.8%, the highest proportion of any country in the European Union. 

These figures mean that Greece has overtaken Spain as the country with the highest unemployment rate anywhere in the bloc, and the government still has a good portion of its austerity measures to implement. And that’s just to be allowed to borrow more money. What a mess.

And while all that is going on, the European Central Bank (ECB) has decided to keep eurozone interest rates unchanged, leaving them on 0.75%. Analysts were expecting this decision, so no surprises shocks to the markets there.

It is not thought that the ECB will cut its rates any further later in 2013 either, as the 0.75% mark has been in place for six months. This was down from 1% in July. 

Nonetheless, it looks like the eurozone will just have to hold tight for the time being: it is now back in recession after all. A contraction of 0.1% between July and September, and a 0.2% contraction in the three months before that have left the continent in a bit of a bind. The endless EU summits and rhetorical speeches from leaders don’t seem to be doing anything to improve the situation.

Closer to home, the UK’s Bank of England has also decided to keep interest rates where they are, but also clarified that it is not currently planning any more quantitative easing to stimulate the economy.

A bit of a dry afternoon for European economics, but when the situation is so bad, ‘nothing’s happened’ is pretty bad news…

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