Rising tide of unemployment ‘risks opening north-south divide in EU’

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Record unemployment and struggling social welfare systems in southern Europe risk dividing the continent, the EU has warned as new figures showed joblessness across the eurozone hit a new high.

Official data showed unemployment in the 17 countries that use the currency rose to 11.8 per cent in November, the highest since the euro was founded in 1999. The rate was up from 11.7 per cent in October and 10.6 per cent a year earlier. In the wider 27-nation EU unemployment broke the 26m mark for the first time.

Last year “has been another very bad year for Europe in terms of unemployment and the deteriorating social situation”, said Laszlo Andor, the EU’s Employment Commissioner.

“Moreover, it is unlikely that Europe will see much socio-economic improvement in 2013,” he said.

A closer look at the figures shows the rise in unemployment was greatest among those countries – mostly in southern Europe – where market concerns over excessive public debt have pushed governments to make the toughest savings. States have raised taxes and slashed spending – including by cutting wages and pensions, measures that hit the labour force in the pocket and reduce demand in the economy.

The single biggest increase in unemployment over the past year took place in Greece, where joblessness soared to 26 per cent in September, up 7.1 per cent over September 2011’s 18.9 per cent. But the highest overall rate in the EU was in Spain, where 26.6 per cent of the workforce was jobless in November. By contrast, unemployment in Austria was 4.5 per cent and 5.4 per cent in Germany.