The European Union raised its growth forecast for next year to a meager 0.7%... That’s up from the 0.1% contraction that was forecast back in May.
“The Tuesday forecast did not change an estimate for the economy of the 16 nations that use the euro to contract by 4 percent this year. It sees the EU economy shrinking by 4.1 percent in 2009,” says the Associated Press.
And that means job losses through the end of this year – at least.
Even though the European Commission now sees growth for 2010, unemployment could swell to its highest level since 1995. (So could the budget deficit.)
The European Commission estimates that the unemployment rate will reach 10.9% in 2011. In fact, unemployment has doubled in Spain over the past two years. For the month of October, Spain saw its jobless claims climb by 2.6%, for an annual change of 35.1%. The service industry took the lion’s share of the claims.
Barbara Kollmeyer of MarketWatch reports, “Spain has one of the highest unemployment levels in Europe. On Friday, Eurostat said Spain’s September jobless level was 19.3%, just under 19.7% recorded for Latvia.”
That means the number of unemployed people in Spain has climbed above 3.8 million.
But Spain isn’t the only country with problems. Greece and Ireland have also suffered high unemployment. The situation is only going to get worse for the EU, as more job losses are coming down the pipe.
Reuters reports that HSBC Holdings (HBC:NYSE) will be cutting 1,726 jobs in the U.K. That’s on top of the 1,200 the company cut back in March. The Royal Bank of Scotland (RBS:NYSE) also said it was slashing jobs. Yesterday the company said it would cut 3,700 jobs.
The bleeding isn’t contained to the financial industry, either.
Nokia Siemens – a joint venture between Nokia Corp. (NOK:NYSE), the mobile telecom company based in Finland, and Siemens (SI:NYSE), the German electronics and engineering company – announced today that it wanted to cut annual costs by 500 million euros (US$740 million) by 2011.
That puts nearly 5,800 jobs at risk, according to Reuters.
Back in April 2007, this joint venture slashed costs by 1.5 billion euros (US$2.22 billion), and 9,000 people lost their jobs.
While economists like Martin van Vliet, from ING Bank in Amsterdam, are telling Bloomberg that “the odds of a jobless recovery in the eurozone are much higher than in the U.S.,” that does nothing for the 10.9% of the population that will be out of work in 2011.
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