Euro zone unemployment at the end of last year reached its highest since the introduction of the European single currency, latest data from the European Union's statistics office Eurostat showed on Tuesday.

Following are Eurostat data on unemployment in the 17 countries sharing the euro and the 27 members of the European Union (unemployed as percentage of labour force):



It's the eighth month in a row that unemployment is rising. If I could name a silver lining it is that the increase of 20,000 is the lowest in the past eight months. But unemployment is at 10.4 percent, which is the highest we've had since 1998 and the introduction of the EMU.

If you look at employers' polls like the one we had yesterday then we're looking at a further increase over the coming months. So that is worrying. What is especially worrying is that the average European numbers are pushed down by a declining trend in Germany while we see scarily high numbers in southern Europe.

That's the most worrying aspect of these numbers because these countries have to get in sight of an improvement soon. Look at Greece where unemployment is some 20 percent, 23 percent in Spain. At a certain point this could lead to political unrest.

Those numbers aren't sees as important, or at least market moving, but for me this is the most painful aspect of the whole situation we're facing in Europe, this great divergence on the labour market. Because if unemployment in Germany is falling, we may see less preparedness to help out the rest of the euro zone.


It is not a surprise, unemployment is a lagging indicator so it is not a surprise. We know that the European economy strongly slowed down in the second half of 2011, that is translated into a rise in the level of unemployment. We know that the uncertainties are large so companies will be very careful before employing people.

Saying that ... it is at a historically low level in Germany, in 20 years it hasn't been as low and so it is good to say the two things together. That shows that Germany, in putting into place reforms, has showed that there is a way to prevent this rise in unemployment.

That shows that if we want to fight against unemployment you need to follow the German example.

I'm not expecting unemployment to fall in Europe (in January). I think it will rise a little bit because uncertainly remains large and unemployment follows behinds and there will also be the effect of budgetary austerity.


If you think about the direction of employment expectations that you see across various business surveys, the outlook for employment doesn't look particularly enticing, simply because the uncertainty is very high.

In many cases you find firms continuing to delay investment projects. For those that are still making profits, hiring is being frozen, and for those which are under pressure to hit results or losing money, job losses are becoming the only solution that they have.

So it's quite difficult, and unemployment will continue to increase, we think, throughout the whole of 2012.


Every job created in Germany leads to a drop in the unemployment total, simply because they have demographics supporting that and a lot of people leaving the workforce. But undoubtedly they are a lot more competitive than the rest.

(Reporting by Robin Emmott and Charlie Dunmore; editing by Rex Merrifield)