Eurozone sinks deeper into the mire as unemployment hits record high

| August 1, 2012 | 0 Comments

By
Hugo Duncan

19:14 EST, 31 July 2012

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19:14 EST, 31 July 2012

The eurozone lurched deeper into crisis yesterday as unemployment hit a record high.

Official statistics agency Eurostat said the jobless total in the single currency bloc rose by 123,000 in June to 17.8m – or 11.2 per cent of the workforce.

That left unemployment in the eurozone far higher than the 8.2 per cent seen in the US and 8.1 per cent in Britain, dealing yet another blow to confidence in the flailing euro.

Solution? European leaders insist they have a grip on a crisis that threatens to tear the single currency apart

Solution? European leaders insist they have a grip on a crisis that threatens to tear the single currency apart

The bleak figures came as European leaders insisted they had a grip on a crisis that threatens to tear the single currency apart.

‘Some light is appearing at the end of the tunnel,’ said Italian prime minister Mario Monti.

‘We and the rest of Europe are approaching the end of the tunnel.’

London-based consultancy Fathom yesterday warned that the UK economy would crash 5.2 per cent next year if the euro collapsed – even worse than the 4 per cent slump in 2009.

Mario Draghi, president of the European Central Bank, last week said the ECB would do ‘whatever it takes’ to save the euro. ‘And believe me, it will be enough,’ he said, setting the stage for a crucial meeting of the ECB in Frankfurt tomorrow.

It fuelled hopes that the ECB will resume its government bondbuying programme to shore up Spain and Italy.

But it is now feared the ECB could disappoint. ‘Everybody is waiting for Thursday to see if Draghi can deliver,’ said Lex van Dam, a hedge fund manager at Hampstead Capital. ‘He’d better pull a big rabbit out of his hat.’

Unemployment in Britain has been falling in recent months despite the return to recession and the crisis in the eurozone.

The Reed Job Index, published by recruitment firm reed.co.uk, showed the number of jobs up for grabs rose 2.5 per cent in July.

There are 13 per cent more jobs available than a year ago. ‘The economy may be in a healthier position than other indicators suggest,’ said reed.co.uk managing director Martin Warnes.

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