Coronavirus: Job support schemes limitsurge in eurozone unemployment | Business News

The jobless rate in the eurozone hit 7.3% in April – the first full month covering coronavirus lockdowns across the continent. Data from the European Union’s statistics body Eurostat covering the 19 nations which use the single currency charted a rise from 7.1% in March – a month when the […]

The jobless rate in the eurozone hit 7.3% in April – the first full month covering coronavirus lockdowns across the continent.

Data from the European Union’s statistics body Eurostat covering the 19 nations which use the single currency charted a rise from 7.1% in March – a month when the UK’s rate was recorded at 3.9% despite a surge in benefit claims.

Economists said the euro area figures were flattered by a leap in the number of people no longer considering themselves as jobseekers and the fact that national job retention schemes, similar to the furlough support in the UK, were supporting employment through the worst of the COVID-19 crisis.

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Germany is already in recession

Eurostat said 211,000 workers lost their jobs in April, leaving the total number out of work in the euro area just shy of 12 million.

Germany, Europe’s largest economy which is already in recession following damage to its export-led model from the effects of the US-China trade war, reported separate jobless figures covering May.

The Federal Labor Agency said the unemployment rate increased to 6.1% last month from 5.8% in April, with the jobless total hitting 2.8 million.

That represented a rise of almost 170,000 on April’s figure.

German Chancellor Angela Merkel gives a media statement on the spread of the new coronavirus disease (COVID-19) at the Chancellery in Berlin, Germany, March 22, 2020. Michel Kappeler/Pool via REUTERS
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German Chancellor Angela Merkel is tipped to announce further economic stimulus for Europe’s largest economy

The country has seen more than 10 million workers’ wages be supported through a short-time work programme, designed to protect jobs as part of government aid schemes totalling €1trn to date, as the cogs of its economy start to get back into gear.

Germany’s recession is expected to deepen in the current second quarter that is also expected to tip other major European economies, including France, Spain and the UK, into the sharpest downturn for decades.

Closely-watched surveys covering the service sectors for the eurozone and UK, published separately on Wednesday, highlighted an easing in the record collapse in activity witnessed in April but warned of a slow path to recovery.

The Purchasing Managers’ Index (PMI) May readings, based on company responses, also suggested there would be no let-up soon in the crisis facing employment as the private sector faces an easing in support from government wage schemes.

The European Central Bank is in Frankfurt
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The European Central Bank’s Pandemic Emergency Purchase Programme already stands at €750bn

In the case of the eurozone, financial markets are expecting the European Central Bank (ECB) to boost its emergency COVID-19 bond-buying operation by a further €500bn to €1.25trn on Thursday to support economic recovery.

But Robert Alster, head of investment services at Close Brothers Asset Management, said of the eurozone’s position: “The elephant in the room is the basic economic principle of demand.

“Unless governments, in collaboration with the ECB, can find a way to stimulate it, and fast, the EU may find itself in this uncomfortable position for some time to come.”

Tonight and tomorrow night at 8pm, Dermot Murnaghan will be hosting After The Pandemic: Our New World – a special live programme about what our world will be like once the pandemic is over.

Thursday’s programme will include an exclusive interview with Prince Charles.

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