Sunday October 26, 2014 Search
Weather | Athens
17o C
13o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Euro jobless scourge seen defying leaders’ 120-bln-euro billion push

Ian Wishart & Kristian Siedenburg

European Union leaders pondering the fruits of a 120 billion-euro ($163 billion) push to jump-start the economy and create jobs can look to data this week for evidence of how little has been achieved.

The euro-area unemployment rate probably held near a record in November at 12.1 percent, according to the median estimate in a Bloomberg News survey of economists. That report on Jan. 8 follows tomorrow’s release of December consumer-price data. Analysts see inflation hovering near the four-year low that preceded a surprise interest-rate cut a month earlier by the European Central Bank.

In December, EU leaders acknowledged their struggle to create jobs, 18 months after they unveiled the Compact for Growth and Jobs, saying unemployment remains “unacceptably high.” Governments are relying for continued support from the ECB, which may this week repeat its vow to keep its policy accommodative for “as long as necessary.”

“Unemployment is bound to remain high amid a sluggish recovery,” said Tobias Blattner, senior economist at Bank of America Merrill Lynch in London. “And with credit remaining scarce and expensive in large parts of the euro area, inflation will fail to creep higher. Deflation fears, however, are unlikely to materialize.”

The euro was little changed against the dollar today, trading at $1.3579 at 8:36 a.m. in Brussels. The Stoxx Europe 600 Index was up 0.6 percent at 327.64.

With the euro-zone economy battered by the debt crisis and slow to shake off a record-long recession, policy makers are struggling to find a recipe for growth. The ECB estimates that the euro-area economy contracted 0.4 percent in 2013 and will expand 1.1 percent this year.

Meager growth has forced European companies to shed jobs in a bid to cut costs and remain competitive. Last month, European Aeronautic, Defence and Space Co. said that it would cut 5,800 jobs in Germany, France, Spain and the U.K. Veolia Eau France said that it would open talks on about 700 voluntary departures.

Such staff reductions will keep the jobless rate at 12.1 percent on average this year, before dipping in 2015, according to a Bloomberg survey of economists.

When EU leaders announced their growth and jobs initiative in June 2012, the unemployment rate was 11.4 percent. Their program of “fast-acting growth measures” included earmarking 55 billion euros of structural funds for small business and youth employment. They also added 10 billion euros to the capital of the European Investment Bank, “increasing its overall lending capacity by 60 billion euros.”

In Spain, which has the euro area’s second-highest unemployment rate, the number of jobless fell by 107,600 in December from the previous month to 4.7 million, the Labor Ministry in Madrid said last week.

By contrast, economists forecast the German jobless rate as defined by national standards, set for release tomorrow, to remain at 6.9 percent, a Bloomberg survey shows. The level comparable with other euro countries was 5.2 percent in October, the second-lowest after Austria, while Greece has the highest rate at 27.4 percent.

Euro-zone unemployment “is likely to stay at a very high level for some considerable time to come,” said Howard Archer, chief European and U.K. economist at IHS Global Insight in London. “That’s got to have a limiting impact on consumer spending, particularly when you think how weak wage growth is in most countries.”

Tomorrow’s euro-area December inflation report will probably show consumer prices grew 0.9 percent from a year earlier, the same rate as a month earlier. The EU’s statistics agency in Luxembourg will publish the inflation data at 11 a.m. local time and the unemployment numbers at the same time on Wednesday.

After cutting its main refinancing rate to a record-low 0.25 percent in November, the ECB sees “no immediate need to act” further on “encouraging signs” that the euro area’s crisis is easing, President Mario Draghi said on Dec. 28 in an interview published in Der Spiegel.

The ECB will leave its key rate unchanged on Jan. 9, according to all 50 economists in a Bloomberg News survey.

This week’s “data will likely provide a message similar to that of the previous months: low inflation in an environment of an uneven recovery,” said Jacques Cailloux, chief European economist at Nomura International Plc in London. “The ECB is getting what it expected, so it’s hard to see them responding with any kind of action. Individual economies aren’t improving at the same speed, but overall there’s no indication that the euro-area recovery is faltering.”

The nascent recovery is reflected in improving economic confidence. The European Commission will publish the results of its December survey on Jan. 9, with the gauge forecast to rise to 99.1, the highest since July 2011, according to a Bloomberg survey of economists.

[Bloomberg]

ekathimerini.com , Monday Jan 6, 2014 (10:35)  
Nicosia says reforms are bringing results
TAIPED waits for green light from Eurostat
Trade deficit shrinks on big drop in imports
SMEs unable to claim subsidies
Samaras pledges action after flash floods in Athens
Authorities began on Saturday assessing the damage done by flash floods in various parts of Athens a day earlier, with Prime Minister Antonis Samaras pledging that all those affected would b...
No court hearings for civil cases
Greek courts are to stop conducting hearings, which include witness questioning, for civil cases, according to plans drawn up by the Justice Ministry. Kathimerini understands that in a bid t...
Inside News
BASKETBALL
A win is a win is a win for Olympiakos
A bad Olympiakos defeated a worse Laboral Kutxa 63-57 to make it two out of two in the Euroleague on Friday. In a game where the two teams had an overall field goal rate of about one in thre...
SOCCER
Panathinaikos snatches point at Eindhoven
Panathinaikos offered its fans a glimpse of its glorious past in European competitions snatching a draw at PSV Eindhoven, on an otherwise bad night for Greek soccer in the Europa League, as ...
Inside Sports
COMMENTARY
End of reason, end of humanity
The effects of a slew of new and increased taxes introduced since the start of the crisis were first observed in the wages of those still fortunate enough to have jobs, who saw their take-ho...
EDITORIAL
Banks need to step up
What has been leaked so far regarding the results of the stress tests on Greece’s lenders, which are due to be published on Sunday, appears positive. Greece needs a healthy, private banking ...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Nicosia says reforms are bringing results
2. Samaras pledges action after flash floods in Athens
3. No court hearings for civil cases
4. Greece’s lenders seem adamant that gov’t must act on bailout commitments
5. Future of Attica trash set to become clearer
6. Policeman admits to murder of his cousin-in-law
more news
Today
This Week
1. End of reason, end of humanity
2. Samaras pledges action after flash floods in Athens
3. Banks need to step up
4. Greece’s lenders seem adamant that gov’t must act on bailout commitments
5. No court hearings for civil cases
6. Nicosia says reforms are bringing results
Today
This Week
1. The past, present and future of the Greek debt crisis
2. Greece’s closed society is central to its current malaise
3. Greece must stick to reforms, says Schaeuble
4. At least 11 banks to fail European stress tests, three in Greece, report says
5. Cyprus to block Turkey's EU talks after EEZ violation
6. Stop moaning and get in the game
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.