Unemployment in Europe Rises for Fifth Consecutive Month

FRANKFURT, KOMPAS.com - The unemployment rate in Europe rose for a fifth consecutive month in August as the region is experiencing a surge of new Covid-19 infections.

The uptick in the number of jobless Europeans has sparked concerns that government support programs won’t be sufficient to keep businesses affected by coronavirus restrictions afloat forever.

The number of unemployed people in Europe rose to 8.1 percent in the 19 countries that use the Euro currency in August, up from 7.9 percent in July, official statistics showed Thursday.

Read also: Small Rise in EU Unemployment Rate Despite Easing Lockdown

Some 13.2 million Europeans were unemployed and the number of those out of work rose by 251,000.

Economists expect a further rise as wage support programs expire, while an increase in infections in many countries has increased fears that some restrictions on business interaction may have to be reimposed.

Some 3.7 million people are still on furlough support programs in Germany, the Eurozone’s largest economy.

The government has extended its emergency support through the end of 2021.

Read also: German Economy Shrinks 10.1% in Q2, but It’s Not All Bad News

National governments have poured in fiscal stimulus in the form of support loans and guarantees for business, while the European Central Bank has launched a €1.35 trillion ($1.57 trillion) monetary stimulus in the form of regular bond purchases with newly printed money through at least the middle of next year.

That has helped keep financial markets calm and credit flowing to businesses.

But all those measures have not halted a wave of corporate announcements of job reductions.

Read also: European Airlines Look to Pre-Flight Covid-19 Tests to Salvage Industry

Companies in the hardest-hit industries such as airlines, tourism, and restaurants may face a long period of substantially diminished demand for their services and are laying off workers.

The coronavirus in some cases has also accelerated restructuring programs that existed before the pandemic. 

(Writer: David McHugh) 

Source: https://apnews.com/33474f925f42bc63df440b2d49c6936c