Unemployment across the 27 EU member states is set to worsen in 2010, and may not begin to fall until 2011, the European Commission said in its annual Joint Employment Report yesterday (15 December).
'Things will get worse before they get better' was the message delivered in Brussels as the Commission presented its analysis of the EU job market in 2009, and looked ahead to the coming years.
According to the latest Commission forecasts, unemployment will worsen over the course of 2010, peaking towards the end of the year at approximately 10.3%. This would mean that a total of 28 million Europeans should be out of work in a year's time.
However, officials emphasised that this figure is lower than previous forecasts, which projected unemployment rates could climb as high as 11% or more. The Commission attributes this to the relative success of the EU's recovery plan, which drew upon the European Social Fund (ESF) and the European Globalisation Fund (EGF).
"Social protection systems have proven their effectiveness: automatic stabilisers have cushioned the immediate social impacts of the downturn, although to different degrees within the EU," a Commission press release claimed.
The report drew particular attention to Germany and the Netherlands, where the adoption of existing short-term work measures meant these countries experienced a relatively low increase in unemployment.
At the other end of the spectrum, the EU countries hardest-hit by unemployment in 2009 were the Baltic states, Spain, Ireland and more recently the UK.
EU countries have 'stepped up' their employment strategies
According to the report, EU member states have "considerably stepped up" their employment and social strategies in 2009, cushioning the blow of the worst European recession in a generation.
However, given that the vast majority of stimulus spending went to household budgets, as opposed to labour markets, officials cautioned that in the Commission's view, member states should absolutely not cut back on labour market measures.
It is important that member states "set conditions for sustainable labour market recovery now," one official noted.
Report to influence long-term growth strategy
Indeed, the report encouraged member states to begin planning for the future right away, according to their domestic unemployment situations. Countries in dire financial straits must focus on reducing inactivity and long-term unemployment, while countries where the worst is over should concentrate on longer-term reforms and put in place structural measures for sustainable growth, it argues.
Commission officials were quick to emphasise that the Joint Employment Report's (JER) conclusions must feed into the EU's long-term plans for sustainable growth and improved labour markets.
In particular, the JER will be a "key aspect" of the EU's 2020 strategy, given the latter's focus on employment.
"Coordinated measures and support at EU and member-state level have significantly contributed to stabilising economies and stemming higher rises in unemployment in 2009. However, we now need to avoid further job losses and recreate jobs that have been lost in the crisis," said European Commission President José Manuel Barroso.
"We must look ahead and continue our coordinated approach to ensure the sustainability of jobs and growth in the long-term. Through our future EU 2020 strategy we will restore our social market economy to health and move the European Union towards a stronger, greener and more inclusive economy," Barroso said.
Employment Commissioner Vladimír Špidla added: "Balancing short-term measures with long-term reforms is now the key challenge for EU employment policies. We will need to reinforce, re-orient and finally phase out our crisis response measures to improve the flexibility and security of EU labour markets and increase the economy's resilience to future downturns."
- Jan-March 2010: Draft JER will be discussed by employment and social affairs ministers in the Council. When adopted, it will become a joint report by the Commission and the member states.
- 25 March 2010: JER recommendations to be discussed by EU leaders at their spring summit.