Europe debt crisis putting job recovery efforts at risk — ILO

GENEVA — Market volatility and the European debt crisis are putting at risk efforts to cut unemployment which hit historic highs in 2009, the International Labor Organization (ILO) said Tuesday.

In a report on the eve of its annual conference, the ILO said there were growing concerns the sovereign debt crisis could hit growth prospects.

“The risk of a new phase of the financial crisis around sovereign debt has appeared, jeopardizing prospects of growth for some countries, potentially affecting the global economy and again raising doubts about the stability of the international financial and monetary system,” said Juan Somavia, ILO director-general.

Measures taken by governments to counter the impact of the global economic crisis have helped create or save 21 million jobs, the ILO said.

At the same time, some 34 million people lost their jobs between 2007 and 2009, and the number of unemployment reached a record 212 million people last year while those workers in precarious unemployment was around 50%.

“We know that there is no sustainable recovery without [a] jobs recovery,” said Mr. Somavia.

“The test we have to face is to secure and accelerate a jobs-rich recovery and get onto a path of strong, sustainable and balanced growth that leads to the social stability provided by decent work for all.”

“This is the foundation of a sustainable process of reducing [budget] deficits and debt,” he added.

The issue will be at the core of discussions at the 99th ILO conference in Geneva.

The annual conference, which gathers some 4,000 representatives from governments, unions and employers, will be chaired this year by a French delegate, former minister Gilles de Robien, according to diplomatic sources.

Debt-laden Europe logged record unemployment on Tuesday. The unemployment rate hit 10.1% in April, its highest since the euro came into being in 1999 in just one of a series of blows on Tuesday to the euro zone economy after a brief lull last week in market pressure.

Almost 16 million people were out of work across the 16 countries that share the euro, the European Union said.

The numbers reached more than 23 million in the 27-nation EU as a whole, including non-euro giants Britain and Poland, 2.4 million more than one year earlier.

Analysts noted that the number of new jobless in the euro zone, at 25,000 in May, was the smallest monthly rise since last November, and well down from the previous month.

However, “the rise in the number of euro zone jobless spiked up to 287,000 in the first quarter of 2010 from 137,000 in the fourth quarter of 2009,” London-based IHS Global Insight economist Howard Archer underlined.

“Despite April’s much-reduced rise in unemployment, we remain doubtful that the euro zone labor market is on the brink of turning around,” he stressed.

The latest figures show US unemployment running at 9.9%, and Japan’s just 5%.

Throughout the EU, only Germany recorded a fall in unemployment over the full year, from 7.6% to 7.1%.

Deficit-plagued Spain, with a 19.7% rate beaten only by Latvia, saw unemployment among under-25s reach a dizzying 40.3% in the first quarter of 2010. — AFP