Joblessness up in Eurozone

Julian Harris
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UNEMPLOYMENT has spiked across the troubled Eurozone, while rising inflation is adding to the single currency area’s woes, official data showed yesterday.

And yet another turbulent day in Italy suggested that the debt crisis has not yet been cured by the agreements announced by European leaders last week.

“Looking ahead, the real test for the euro area lies with the ability of individual member states to deliver on fiscal austerity and structural reform. Italy is centre stage in this context,” Société Générale economists said in a note.

Yields on Italian 10-year debt hit a euro-era high on Friday, and continued their climb yesterday. At one point yields hit 6.18 per cent before closing at 6.09 per cent, up 1.16 per cent on the day.

Yields of seven per cent and above would threaten to lead Italy to insolvency, analysts have said.

The yields on five-year debt jumped even higher, rising 2.3 per cent.

Joblessness in Italy was up to 8.3 per cent in September, while across the Eurozone as a whole it has reached a demoralising 10.2 per cent, Eurostat revealed yesterday.

Unemployment in the euro area jumped 188,000 between August and September. Yet stubborn inflation stuck at three per cent, above the European Central Bank’s target, raising the spectre of stagflation.

The FTSEurofirst 300 index of shares lost 2.17 per cent during the day’s trading, although it remained up on the month for the first time since April.

The German DAX lost 3.2 per cent on the day, while the French CAC was down nearly as much, shedding 3.16 per cent.