The EU’s overall unemployment rate is likely to fall to 10% in 2015 and to 9.5% in 2016, down from 10.3% in 2014, the Commission said on Tuesday (4 November), as labour markets show signs of recovery.
The unemployment rate in the eurozone is, however, expected to be significantly higher, dropping to 11.3 % in 2015, and 10.8% in 2016, from 11.6% in 2014, according to the Commission.
The EU’s executive said that job creation is still moderate, and that unemployment rates are falling slightly from high levels.
Employment growth is expected to be limited at 0.4% in the eurozone and 0.7% in the EU overall 2014. In 2015, the Commission expects that economic recovery, shown by for example wage increases, will increase employment levels by 0.5% in the eurozone and 0.6% in the EU. The Commission claimed that more “meaningful” labour market improvements should occur towards the end of the forecast horizon.
Jyrki Katainen, the Finnish Vice-President for Jobs, Growth, Investment & Competitiveness, stated at a press conference that the euro currency is not the reason why the eurozone is fairing much worse when it comes to growth and employment than most regions in the world, as it is one of the most stable currencies. Instead, Katainen highlighted that the currency might have given some member states a “false sense of security”, preventing them for making the necessary reforms ahead of the crisis.Anti-austerity protest. Athens, 2010. [Joanna/Flickr]
Anti-austerity protest. Athens, 2010. [Joanna/Flickr]
The Finnish Vice-President presented the Commission’s economic forecast on Tuesday together with Pierre Moscovici, the Commissioner for Economic and Financial Affairs, Taxation and Customs.
Moscovici said that the austerity efforts imposed by governments in recent years resulting in high levels of unemployment in most member states, were justified, due to the high levels of debts in both the private and public sector.
The socialist commissioner added that “structural reforms and fiscal consolidation are still a necessity”.
Among individual member states, Greece, which has experienced devastating unemployment rates over the past years during the economic crisis, is expected to witness the largest fall in unemployment to 22% in 2016 as opposed to 26.8% this year. Meanwhile, Spain is likely to overtake Greece when it comes to the worst figures for unemployment. The Commission predicts that the country will have an unemployment rate of 22.2% in 2016. For 2014, the Commission expects a rate slightly under 25%.
Bernadette Ségol, the Secretary-General of the European Trade Union Confederation (ETUC), said that the forecast for unemployment over the next two years is “unacceptably small and slow”.
Ségol mentioned that the €300 billion investment plan proposed by Commission President Jean-Claude Juncker will not be enough to get Europe back to work.
“The new Commission will have to propose more ambitious action,” the ETUC Secretary-General said.