“Without a prompt policy turn – to address the crisis and to regain the trust and support of workers and enterprises – it will be difficult to implement the reforms necessary to put the eurozone back onto a path of stability and growth,” the report said.
The report released by the UN’s International Labour Organization (ILO) titled “Eurozone job crisis: Trends and policy responses” says that there is growing evidence that European labour markets have still not recovered from the global economic crisis that hit the world economy in 2008, and a prolonged jobs slump may be looming, stoked by fiscal austerity measures.
“In a depressed macroeconomic context, these reforms are likely to lead to increased numbers of layoffs without any boost to job creation at least until economic recovery gathers momentum,” it said.
There are already 3.5 million fewer jobs in the eurozone than before the crisis. Employment has fallen since the start of this year in half of the countries that have adopted the single European currency, the report said.
There are 17.4 million people looking for jobs in the region, and adopting a growth strategy centred on employment can bring about economic recovery in the eurozone, it said.
The report said young people are at particular risk from the current crisis, with youth unemployment rate at 22 percent in the eurozone, especially in southern countries like Italy, Portugal, Greece and Spain. These last two countries have a youth unemployment exceeding 50 percent.
People’s confidence in the financial system has been eroded and eurozone members need to pass urgent reforms and introduce new regulation to prevent financial malpractice, it said.