New unemployment figures for the euro zone out on Thursday showed the overall rate was 12.2 percent last month, maintaining the record high set in August. Meanwhile, August’s figure was revised up to from the original 12 percent.
The news comes with other disturbing figures: The rate for people under 25 rose, now standing at 24.1 percent. The Royal Bank of Canada also notes that while previous numbers showed the total number of unemployed people declining, revisions in this report erase those gains, and it notes, “the latest data suggest that number has actually ticked up for the last 29 consecutive months.”
There are big disparities in unemployment rates between different countries as well. Germany and Austria’s rates stand at 5 percent, while Spain’s is at 26.6 percent and Greece’s most recent figure from June was 27.6 percent. Spain’s economy recently emerged from its two-year recession, but its unemployment rate belies how much farther it has to go.
The euro zone as a whole also emerged from its recession in the second quarter of the year. Some tentative progress has been made since the austerity requirements that drove many European countries into deep recessions have been loosened. That burden of steep government cuts could be alleviated through a change to budget policies that would cut Spain’s estimated structural deficit in half for this year, reducing the amount of austerity it still has to enact, and would also benefit austerity-stricken countries such as Ireland, Greece, and Portugal. Other moves have been made to ease the requirements, and a growing chorus of EU officials have called for a reversal of course.
Original projections about the impact of austerity have proven to be far too optimistic. The European Commission’s own economist argues that austerity has deepened and lengthened the area’s economic troubles.
Yet while Europe looks poised to pivot away from demanding severe budget cuts, the United States is moving in the opposite direction. Republicans have called for keeping the across-the-board spending cuts known as sequestration in place despite the bite they have already taken out of the economy. The latest debate is over how much to cut one of the most effective safety net programs, even though there is no need to be cutting the deficit at this point.