Europe 'risks split' as unemployment soars
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% in November, the highest since the euro was founded in 1999. The rate was up from 11.7% in October and 10.6% a year earlier.
In the wider 27-nation EU, unemployment broke the 26 million 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% in September, up 7.1% over September 2011's 18.9%. But the highest overall rate in the EU was in Spain, where 26.6% of the workforce was jobless in November, up 3.6% from last year.
By contrast, Austria posted the lowest unemployment rate in the EU, at 4.5%. The rate in Luxembourg was 5.1%, and the rate in Germany was 5.4%. Britain had 7.8%.
And increasingly, southern nations are chipping away at their social safety system to make do.
"Most national welfare systems have lost much of their ability to protect household incomes against the effects of the crisis," said Mr Andor.
While the threat of a collapse of the eurozone due to too much government debt may have receded, many economies wallow in recession and joblessness continues to rise, creating poverty and fuelling social discontent.
"A new divide is emerging between countries that seem trapped in a downward spiral of falling output, fast rising unemployment and eroding disposable incomes and those that have so far shown good or at least some resilience," Mr Andor said.
As unemployment across the eurozone continues to rise, many analysts are concerned whether the political will to continue to cut budgets can be sustained.