Eurozone Joblessness Rises to a Record 12%

europe unemployment eurozone economy cyprus debt crisis
Paul White/AP Two men on a street in Madrid rummage through old clothes mixed with garbage on Wednesday. Figures released Tuesday showed unemployment across the 17 eurozone countries, including Spain, rose to 12 percent during the first two months of the year.

LONDON -- Unemployment across the 17 European Union countries that use the euro has struck 12 percent for the first time since the currency was launched in 1999, official figures showed Tuesday.

Eurostat, the EU's statistics office, said the rate in February was unchanged at the record high after January's figure was revised up to 12 percent from 11.9 percent.

During the month, a net 33,000 people in the eurozone joined the ranks of the unemployed. Spain and Greece continued to suffer from unemployment rates above 26 percent, and many other countries were seeing their numbers swell to uncomfortable levels.

It's not all doom and gloom. Germany, Europe's biggest economy, has an unemployment rate of only 5.4 percent. That's even better than the U.S. rate of 7.7 percent.

The February figures came before the recent Cyprus crisis, which has reignited concerns over the future of the euro. Under the terms of its bailout, big depositors in the country's two top banks are facing hefty losses.

Following Cyprus' protracted and chaotic bailout discussions, which saw the country's banks close for the best part of two week, unemployment on the east Mediterranean island nation is expected to ratchet higher over the months ahead as the economy contracts sharply.

Many economists are forecasting that the Cypriot economy will shrink by 10 percent this year alone and see unemployment rise up to Greek and Spanish levels. In February, Cyprus' unemployment stood at 14 percent.

Prior to the Cypriot crisis, there were signs that Europe's debt crisis had calmed. Stock and bond markets had risen for nearly months, boosting confidence in countries' ability to finance themselves.

But while markets have improved, the eurozone economy has sunk back into recession.

A closely watched survey released Tuesday indicated that the recession likely continued in the first quarter. The monthly purchasing managers' index for the manufacturing sector -- a gauge of business activity published by financial information company Markit -- fell to a 3-month low.

Though the PMI wasn't as bad as first estimated a couple of weeks back, it fell to 46.8 points in March. Anything below 50 indicates an economic contraction.

The worry in the PMI survey was that manufacturing activity weakened across the eurozone, including Germany, Europe's export powerhouse.

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