Job figures fall as finance ministers prepare to meet
01.12.2009 @ 17:26 CET
EUOBSERVER / BRUSSELS – New data released by the EU’s statistics office on Tuesday (1 December) shows a rise in the region’s unemployment, and comes one day before finance minister talks on measures to prevent a repeat of the financial crisis.
Eurostat said EU unemployment reached 9.3 percent in October, the highest for over a decade. The figure is a rise of 0.1 percent on the month before and compares with unemployment of 7.3 percent in October 2008.
EU unemployment rose again last month (Photo: Lars Gundersen / Nobel Peace Center)Roughly 258,000 EU citizens lost their jobs in October alone, bringing the total number of unemployed to 22.5 million.
The news comes a day before EU finance ministers are set to meet in Brussels to discuss three new supervisory authorities for the banking, insurance and securities sectors, an important part of the EU’s bid to overhaul its financial supervision.
Problems in the US sub-prime mortgage market last year sparked a financial crisis that quickly turned into a global economic recession causing millions of job losses.
EU finance ministers are also set to discuss the poor state of public finances, with the majority of governments now in breach of the region’s Stability and Growth Pact – rules that limit national budget deficits to three percent of GDP.
On Monday, French economy minister Christine Lagarde said in Berlin after talks with her German counterpart that Paris would aim to bring its deficit below the three percent threshold by 2013, in line European Commission requests.
France had previously stated it needed an extra year to tackle its deficit, but Ms Lagarde cautioned that the new agreement to reach the tougher deadline was dependent on sufficient growth levels.
Germany has also agreed to comply with commission requests to reduce its deficit by 2013.
Difficult exit strategies
The Swedish EU presidency insists the reduction of budget deficits is an essential component of member state fiscal exit strategies, with stimulus spending, bank bailouts and falling tax receipts wreaking havoc on government coffers over the past year.
“The countries worst affected have a long and difficult road back to sound public finances, but it is a journey that must begin soon, in an orderly manner,” Swedish finance minister Anders Borg said on Tuesday.
Government efforts to rein in spending and raise taxes have already caused a series of protests and strikes across the union.
Greece is set to receive a rebuke on Wednesday for not taking the necessary measures to lower its budget deficit, a figure that is now expected to exceed 12 percent of GDP this year following a change of government that caused a sharp forecast revision.
The European Parliament’s economy and financial crisis committees held a public hearing with a number of leading economists on Tuesday, with the dangers of rising debt levels raised by several speakers.
Guillermo de la Dehesa, chairman of the London-based think tank, the Centre for Economic Policy Research (CEPR), said debt levels in a number of countries could soon turn into a vicious circle.
“If levels increase, some states risk getting into a debt-trap which is very hard to exit,” he said.
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