EU unemployment rises

The eurozone unemployment rate hit a record high level in March, jumping to 10.9 percent for the first time for 15 years, official figures showed on Wednesday, Reuters  reports.

Almost 17.37 million men and women looked for work in the single currency area in March, or 169,000 more than in February, according to Eurostat data agency. The 10.9 percent rate equaled an April 1997 record.

The unemployment rate had reached 10.8 percent in February, with the eurozone widely expected to have dipped back into recession as it battles a festering debt crisis.

The rising jobless rate is sure to fuel arguments for governments to switch from austerity-only policies to growth measures in order to revive the eurozone's sickly economy.

Spain, already struggling to fend off fears that it will need a bailout, remained the nation with the highest unemployment rate, at 24.1 percent in March, according to Eurostat.

Business investment rate was down to 20.7% in the euro area and to 20.2% in the EU27.
 
Greece, living off bailout funds since May 2010, came in second again with 21.7 percent in January, the latest figures available for that country.

In an indication of the economic division in Europe between North and South, the lowest March unemployment rates were in Austria, 4.0 percent, the Netherlands, 5.0 percent, Luxembourg, 5.2 percent, and Germany, 5.6 percent.Unemployment remained stable in the wider, 27-nation EU, which includes Britain and Poland, at 10.2 percent in March.

Despite demanding deep government spending cuts across the continent, the European Union's executive body has called for a 6.8 per cent increase in the bloc's own budget for 2013, provoking protests and adding fuel to the debate over austerity in Europe.

The request from the European Commission was condemned in several EU member states as unrealistic in a climate of stagnant economic growth, rising unemployment and cuts in welfare programmes and other government spending. Jan Kees De Jager,finance minister of the Netherlands, whose government collapsed last week amid a dispute over proposed spending cuts, was one of the critics.

The Netherlands is one of a number of EU member states that are net contributors to the Union's budget. The Union receives part of its funding from value-added tax receipts and duties, but the bulk is contributed by the governments of member states according to a formula related to their gross national income. Other net contributors include Germany, Britain and Sweden.

The spending plan must be approved by a weighted majority of EU nations and of the European Parliament. Tough negotiations are inevitable, and the final increase is likely to be less than the commission requested.

Most of the proposed spending increase would be used to pay for projects in Europe's poorer regions that the Union has already promised to support. Because the bloc is nearing the end of its current seven-year funding program, which runs from 2007 through 2013, much of this spending would be carried out next year.

But budget hawks argued that the commission should propose cuts in other areas to allow it to fulfill those commitments while limiting the spending increase to the rate of inflation. Some diplomats argued privately that demanding a big increase  was politically inept and played into the hands of critics of the Union. The European Union has been criticised as being out of touch with its constituents, particularly in countries that have received international bailouts such as Greece, Portugal and Ireland - and by populists in other member countries, like the Netherlands.

But the debate over austerity in Europe has been complicated by clear indications that financial markets are worried that retrenchment across the Continent is eroding prospects for economic growth.