“A deepening social crisis” is how the European Commission (EC) describes the employment situation in the EU. The EC's latest Employment and Social Situation Quarterly Review found rising unemployment across Europe at the end of 2012, but this was only one factor. GDP nose dived, the number of people suffering financial distress remained higher that it has ever been in the last ten years and falling social protection spending may have deepened recession, according to the EC report published yesterday (March 26 ).

“The social crisis in Europe keeps worsening and in a number of Member States there is no tangible improvement in sight. The poorest have very often been the hardest-hit,” said European Commissioner for Employment, Social Affairs and Inclusion László Andor. It is difficult to find positive signs in the EC report and the figures all point to a bleak and ever-worsening situation.

Unemployment rose again in January 2013, to 26.2 million or 10.8 percent of the active population. The figure was higher still for the eurozone – 11.9 percent – but Romania remains one of the very few places where unemployment is showing a falling trend. Unemployment dropped again locally in January to 6.6 percent, continuing the pattern of the last year, which has shown 0.1 percent falls in unemployment every one to two months in Romania.

Youth unemployment across the EU has reached record levels – 23.6 percent in January this year – and the periods of time for which young people are out are lengthening. Overall employment in the EU fell by 0.4 percent in 2012, with a 0.2 percent fall in the final quarter alone. GDP also contracted in the fourth quarter of 2012 by 0.5 percent, the biggest slide since early 2009.

The EC report suggests that austerity simply isn't working in many places in Europe. The cuts in public sector jobs and social spending have, according to the EC, exacerbated recession, bringing the predictable knock-on effects in employment, poverty and all-round hardship. The EC champions its Social Investment Package as a tool to combat the ongoing social crisis.

“Governments need to invest in order to find the way to inclusive growth and to give people a real chance to make a decent living - the Commission's recent Social Investment Package has highlighted ways to do this,” said László Andor. The EC urges governments to maintain or step up public investment, in spite of tight national budgets, arguing that without spending on education, childcare, health and the like, Europeans will be unable to participate in society or advance their economic potential. “Most of all we need more solidarity: within individual countries and also between them. We can only overcome this crisis if we stick together,” concluded Commissioner Andor.

Liam Lever, liam@romania-insider.com