UNEMPLOYMENT in the eurozone will rise by another 4.5 million in the next four years under the current austerity programme, the International Labour Organization (ILO) warned yesterday.
That rise would take unemployment in the 17-nation bloc to 22 million.
However, the ILO report added: ‘It’s not only the eurozone that’s in trouble, the entire global economy is at risk of contagion.’
ILO director-general Juan Somavia warned: ‘Unless targeted measures are taken to increase real economy investments, the economic crisis will deepen and the employment recovery will never take off.’
The report said that the consequences of a longer period of austerity would be particularly severe for young people.
It said that unemployment had not been as bad so far in the downturn as it might have been because some companies were hanging onto staff in the hope of an imminent recovery.
‘If their expectations don’t come true, worker retention may become unsustainable, leading to significant jobs losses,’ it warned.
The unemployment rate in the eurozone hit 11.1% in May, according to official figures from Eurostat.
It took the total number of people out of work to 17.56 million, the highest level since records began in 1995.
In Spain, which has the highest unemployment rate in the eurozone, one in four people is now out of work.
The youth unemployment rate in the eurozone stood at 22.6% in May, meaning 3.4 million people under the age of 25 were jobless.
• Health Secretary Lansley said yesterday he was ‘unable to commit’ to capping the cost of care for the elderly, even though he would like to.
Lansley made clear there could be no guarantee that the money for such a scheme will be found.
He said there were ‘immense financial pressures’ and many other priorities and any decision will await the spending review late next year or in 2014.
Setting out a white paper on the government’s plans to reform social care he confirmed that, from 2015, pensioners moving into nursing homes will be able to borrow money from the government.
He said that the initiative would ensure that no-one would be forced to sell their home to go into care.
But the ‘pay when you die’ scheme would recoup the money, with interest, later.
At present anyone with assets including their home worth more than £23,250 gets no state financial support for social care.