OECD sees Spanish, Greek unemployment rates climbing to 28%

By Mark Deen

Unemployment rates in Spain and Greece are set to rise to 28 percent by the end of next year as the countries struggle to recover from Europe’s debt crisis, the Organization for Economic Cooperation and Development said.

The jobless rate will increase to 27.8 percent in Spain from 26.9 percent currently, the Paris-based organization predicted. In Greece, the rate will rise to 28.2 percent from 26.8 percent, according to the report.

“The social scars of the crisis are far from being healed,” OECD Secretary-General Angel Gurria said in a statement. “Many of our countries continue to struggle with high and persistent unemployment, particularly among youth.”

The report highlights the growing disparity between developed countries as their economies recover differently from a global financial crisis that began with the collapse of Lehman Brothers Holdings Inc. in 2008. In contrast to southern European countries, the unemployment rate in the U.S. will drop below 7 percent by the end of next year, while the rate in Germany will decline to less than 5 percent, according to the forecasts.

In France and Italy, the euro area’s second- and third-largest economies, jobless rates are predicted to increase to 11.2 percent and 12.6 percent respectively by the end of 2014, the OECD said.