Eurozone Unemployment Rate Hits Historic High of 12 Percent

The longest unemployment lines in the history of the European Union are choking that continent’s economic recovery, but have had no noticeable effect in the United States.

February unemployment reached a record-setting 12 percent in the 17 European Union countries that use the euro, with Greece (26.4 percent unemployment) and Spain (26.3) continuing to be a drag on the rest of the continent.

In the United States, February unemployment dropped to 7.7 percent (from 7.9 percent), the lowest level since December 2008. The U.S. economy added 236,000 jobs in February, and unemployment rates dropped in 22 states.

The U.S. Bureau of Labor Statistics will release its March unemployment numbers on April 5.

Youth Unemployment Soaring

Europe, meanwhile, is still trying to get some positive momentum going among its diverse economies. There are now 19.07 million people out of work, 1.8 million more than were unemployed in February 2012.

“Such unacceptably high levels of unemployment are a tragedy for Europe,” EU Employment Commissioner Laszlo Andor said in a press release. “The EU has to mobilize all available resources to create jobs … young people in particular need help.”

Europe’s youth, defined as those younger than 25, have an unemployment rate of 23.9 percent. The Spanish youth rate is an astounding 55.7 percent, while Portugal’s was 38.2 percent and Italy’s 37.8 percent.  Almost 3.6 million young people were unemployed in the eurozone in February, an increase of 188,000 from February 2012.

Could it Get Worse?

Making matters worse, the February unemployment figures do not take into account the crisis in Cyprus, where the government dipped into bank accounts to help finance its share of the eurozone bailout. The raid on foreign investors’ money could set a precedent for other European countries – Spain? Italy? – to tap in to uninsured accounts in their banks.

That would send more chills through a business community that, except for a few economies, has been in a deep freeze for more than five years.

Eurozone manufacturers reduced their workforces for the 14th successive month in March, with steep rates of decline reported in France, Italy, Spain, the Netherlands, Ireland and Greece.

The one encouraging number from Europe was that only 33,000 more people joined the ranks of the unemployed in February, the fewest since April 2011. It was a huge drop from the 222,000 that were added to unemployment rolls in January.

Austria (4.8 percent unemployment), Germany (5.4) and Luxembourg (5.5) have stable, thriving economies, while the countries around them flounder.