Europe Unemployment Rises to Highest Since March 1999

Europe’s unemployment rate rose to the highest in more than 10 years in August as companies continued to cut jobs even as the region’s largest economies emerged from recession.

Unemployment in the 16-member euro region increased to 9.6 percent from 9.5 percent in July, the European Union statistics office in Luxembourg said today. That’s the highest since March 1999 and matched the median forecast from a Bloomberg survey of 23 economists.

The German and French economies both emerged from the recession in the second quarter and the euro-area economy probably followed in the third, according to the European Commission. Rising unemployment may be an obstacle to the recovery, including in Germany, where the government has been offering temporary subsidies to maintain payrolls.

German unemployment remained unchanged at 7.7 percent while Spain’s jobless rate rose to 18.9 percent and Ireland’s increased to 12.5 percent, today’s report showed.

Companies across the euro region have slashed jobs to weather the worst recession in 60 years. Siemens AG has cut its global workforce to 408,000 this year from more than 420,000, while Air France-KLM said on Sept. 4 it plans to cut 1,500 jobs. Dexia SA, Belgium’s biggest bank by assets, announced on Sept. 25 an additional 602 job cuts.

Unemployment in the euro region will rise to 11.7 percent next year, higher than the U.S. or the U.K., the International Monetary Fund said today. The region’s highest rates will be in Spain and Ireland, as both countries suffer from the collapse of their housing markets.

Europe Unemployment Rises to Highest Since March 1999, Bloomberg
10/1/2009 9:33:20 AM