GENEVA: European Union economies have shed almost six million jobs since the global economic crisis struck in 2008, the International Labour Organisation said Monday. In a report on the European labour market, the UN agency said the employment rate across the 27-nation EU stood at 57.6 percent in 2012, down 1.6 percentage points on 2008. "This means that there is still a deficit of 5.9 million jobs to restore employment rates to their pre-crisis levels," the ILO said.
A million jobs have been lost in the past six months alone, it noted. It underlined that despite some signs of labour market recovery that started to materialise in 2010, only five EU members - Austria, Germany, Hungary, Luxembourg and Malta - have employment rates above pre-crisis levels. Countries such as Cyprus, Greece, Portugal and Spain have seen a steady decline in employment rates of more than three percentage points.
As of February, official unemployment stood at 26.3 million in Europe, or 10.2 million more than in 2008, the ILO said. "Importantly, while the deterioration of employment paused during 2010-2011, it has gained momentum over the past year," it noted. Average unemployment in the EU has reached 10.9 percent - with double digit rates in some of the most crisis-afflicted countries - and a record of 12 percent in the 17-nation eurozone. Young and unskilled workers have been the hardest hit, with youth unemployment across the EU at 23.5 percent and stark rates of 58 percent in Greece and 55 percent in Spain.
Companies have increasingly turned to part-time and temporary contracts meanwhile, underscoring the bleak outlook, the ILO said. "The above trends suggest that is necessary to move to a job-friendly strategy. Much of the emphasis so far has been on reducing budget deficits and restoring external competitiveness through 'internal devaluations'," it said.
"While fiscal and competitiveness goals are important, it is crucial not to tackle them through ill-conceived austerity measures and structural reforms that do not address the root causes of the crisis," it added. The ILO said that more measures were needed to resolve systemic problems in the financial sector and to unlock credit for small firms. "More and more countries face downward pressures on wages and employment, thereby affecting domestic consumption and investment and eroding intra-EU trade," it warned.