Eurozone unemployment is at a record high and consumer prices are being driven upward by volatile energy and food prices, data showed on Monday, underlining the fragility of the bloc's economic health.
Joblessness in the euro area stood at a record 12.1% in May, with the number of people out of work rising further above 19 million, Eurostat added.
Government austerity programmes across the continent have helped fuel the economic hardship and provoked widespread public discontent, especially with more than half of young people unemployed in Greece and Spain.
June's inflation reading – at 1.6%, up from 1.4% in May – was the second upward move from a three-year low of 1.2% in April, although it remains beneath the European Central Bank's target of just under 2%.
László Andor, the European commissioner for employment, said: "The current level of unemployment in the EU is neither natural nor acceptable. The EU and its member states have to work together to implement a range of measures to create jobs and to resolve the underlying double-dip economic and financial crisis."
Andor called on EU countries to make reforms and use employment funds agreed during last week’s EU summit, such as a €10 billion pot set aside in the European Social Fund for 2014 to 2020.
Heads of state also agreed to set up a Youth Guarantee, an initiative which aims to ensure that every under-25 receives a job-offer, continued education, a traineeship or an apprenticeship within four months of becoming unemployed or leaving formal education.
Andor also urged member states to prioritise unemployment, particularly among the youth, when choosing how to disburse their share of EU cohesion funds.
Inflation edges up
Economists expect inflation to remain below the target for the rest of this year, giving the ECB scope to leave interest rates at a record low, although signs of improvement at European factories may stop the bank from cutting rates again.
"June's rise was driven rather by unfavourable base effects and the ECB has flagged the possibility of short-term inflation volatility," said Nick Matthews, a senior European economist at Nomura. "We expect inflation to drop sharply again in summer."
Prices of food, alcohol and tobacco products were the key factor driving inflation in June, followed by energy and services, Eurostat said in its first estimate for the month.
Core inflation, which strips out volatile food and energy prices, was stable at 1.2%, and did not appear to sustain an upward trend, economists said.
The ECB said last week it will keep its accommodative monetary policy stance to help a gradual economic recovery that is expected to start in the second half of this year.
EU heads of states agreed in February to launch a €6 billion Youth Employment Initiative, with the aim of making it fully operational by 1 January 2014.
A Youth Guarantee scheme, introduced by each EU country according to its individual need, will apply to young people who are out of work for more than four months. It aims to give them a real chance to further their education, or get a job, apprenticeship or traineeship.
The EU has a 2020 target of 75% employment for the working-age population (20-64 years).