Eurozone Crisis Over – Barroso

European Commission President, Jose Manuel Barroso, thinks that the question over the survival of the Euro has been resolved and that the single currency is here to stay. In his analysis, investors have come to realise that the EU leaders are committed to the future of the Euro and that the turning point came in September 2012 when the ECB announced that it would support unlimited buying of bonds from member states in receipt of an EU/IMF bailout should their borrowing costs in the market become unsustainable.

Speaking to an audience in Portugal, he argued that the way forward required that the EU ensure that its various institutions were fit for purpose and that political union was a “necessity”. He cautioned that the economic situation facing the EU remained difficult.

This observation was underlined by news that unemployment within the Eurozone had hit a fresh record of 11.8%. The figure has climbed by 0.1% from its October level. The unemployment picture within the broader European Union remained unchanged with 10.7% of the workforce idle. The unemployment picture across the EU remains very patchy with Spain experiencing the worst level of unemployment: 26.6%. Greece comes in second worst within the Eurozone group with 20% unemployed. On the other end of the spectrum, Austria enjoys the best employment record with just 4.5% of its workforce idle; Luxembourg comes in with 5.1% out of work and Eurozone powerhouse economy Germany has official figures of 5.4%.

Youth unemployment remains a big problem within the Eurozone with 24.4% of workers under 25 years of age currently out of work. Within the broader EU, the figure is marginally better at 23.7%. Apart from the social and economic problems associated with being unemployed, the figures reveal a major headache for EU leaders since they represent a diminished revenue stream in terms of income taxes and an increased source of expenditure in terms of social security payments.