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Large Variation Exists in Unemployment Rates Across the EU

October 10, 2011

Eurostat recently released the unemployment rates for the 27 members of the EU, and compared to a year ago, there was not much change.  For the EU as a whole, September 2011’s rate was 9.5%, which is actually 0.1% lower than September 2010.  Similarly, the combined unemployment for the 17 countries that use the euro were also 0.1% lower, falling from 10.1% to 10%.  This is all despite the EU being forced to organize three bailouts in the interim.

However, as the above figure shows, there was plenty of variation across the 27 members.  Austria managed to set the bar again, with the lowest rate of just 3.7%, while Spain is at the bottom of the table with a rate of 21.2%.  In addition, some countries have seen significant decreases in their unemployment rate, most particularly the three Baltic countries, while unemployment continues to climb in others.

It is this huge range in unemployment that helps make it so difficult for Europe to agree on a plan to end its financial crisis.  Friday’s New York Times had an article about Slovakia, which has benefited greatly from the euro, but is also very reluctant to bailout Greece.  Many feel that they have made the sacrifices necessary to thrive in the new European economy, and thus it should be up to the Greeks to solve their own problems.

This sentiment is not limited to Slovakia, but common in many other EU member states that have lower unemployment rates.  As a result, perhaps support for rescue packages would increase if it becomes clearer that the euro has really tied everyone together.  Of course, by the time that enough people realize that, it might be too late…

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