EU economy latest: Unemployment high, contracting manufacturing but big differences between countries

The last few days of EU news appear at first glance to be disappointing. Recently released figures show record breaking unemployment, as well as contraction in member states' economies and manufacturing output. Unemployment was high on the agenda at the EU summit in Brussels, just days after Spain announced a new high for unemployment, figures released by Eurostat put EU and eurozone unemployment at 9.9 and 10.4 percent respectively for December 2011. Both figures were unchanged compared to November 2011, but both showed an increase against December 2010 – 0.2 percent up for the EU 27 and 0.4 percent higher for the eurozone. Looking more closely reveals big differences between EU countries. Austria had the lowest percentage out of work, just 4.1 percent, while at the other end unemployment in Spain reached 22.9 percent, more than 3 percent higher than Greece. Romania's unemployment rate was below both the EU 27 and eurozone averages at 7 percent. The manufacturing sector, measured by the Purchasing Managers' Index ( PMI ), produced by Merkit, shows continued contraction in the eurozone, however, the rate of contraction slowed in January and German manufacturing returned to growth. Overall, a slight recession is currently predicted for the eurozone in 2012, but there may well be big differences both between eurozone countries and among the remaining EU states. Recent figures show negative GDP growth for the UK and Spain, but elsewhere modest growth is predicted. The PMIs for Germany and Austria suggest the beginnings of recovery and Romania is currently predicted to record GDP growth in 2012. Liam Lever, liam@romania-insider.com