Labour troubles in the euro zone are bound to go from bad to worse.
A large swatch of the 17-country monetary group remains mired in recession. Both manufacturing and services have been shedding jobs for the past 14 months. The battered financial sector continues to shrink, and deep budget cuts are taking a heavy toll on public service jobs in the devastated periphery.
Unemployment in both Greece and Spain has topped 26 per cent, while the jobless rate for young people under the age of 25 has hit 58.4 per cent in the former, 55.7 per cent in the latter, 38.2 per cent in Portugal and 37.8 per cent in Italy.
And that was happening before the banking crisis in Cyprus sent fresh shock waves across the region.
Jobless numbers had gone up for 21 consecutive months before another 33,000 people were added in February, putting the gloomy tally above 19 million for the first time and the unemployment rate at 12 per cent.
That matched the revised rate for January, also a record since the advent of the euro.
“Such unacceptably high levels of unemployment are a tragedy for Europe,” said a spokeswoman for Laszlo Andor, the European Union’s employment commissioner. “The EU has to mobilize all available resources to create jobs.”
Mr. Andor has beaten this drum before.
But if past performance is any guide, it will not be followed by much in the way of serious measures to tackle what may yet turn out to be the euro’s biggest threat – a rising tide of unemployed people, many of them young and increasingly bitter and all of them facing bleak prospects and diminishing benefits.
Everywhere, in fact, there is mounting evidence that critics of the German-designed austerity imposed on Spain, Ireland, Greece and other fiscal miscreants in the euro zone were right: The diet is sapping what little employment potential they have left.
If the U.S. Federal Reserve were faced with such dire circumstances, there is little doubt as to how it would respond.
But the European Central Bank is another matter. It has room to cut interest rates at its two-day meeting beginning Wednesday, and it has plenty of scope to unleash large-scale quantitative easing.
But it will probably do neither. It was the ECB that helped the euro zone’s reluctant patients swallow Germany’s medicine.
And although there is no risk of inflation – inflation-fearing Germany posted an annual rate of 1.4 per cent in March, and deflation is the bigger threat in the weaker economies – the bank remains ever vigilant.
Meanwhile, the jobless lines grow.