Friday, 15 March 2013

Eurozone employment falls, leaders call for budget flexibility

The recession is clearly taking its toll on the eurozone economy. A report on Thursday showed that employment in the euro area fell 0.3 percent in the fourth quarter of 2012.

Bloomberg reports that amid the weak economy, European governments are loosening up on budget restraint.

“If there is too much austerity, there will be too much unemployment,” French President Francois Hollande said at an EU summit in Brussels late yesterday. “Flexibility is necessary if we want to make growth the priority.”

The euro zone’s economic slump has shoved aside the financial crisis as the bloc’s biggest headache, leading the EU to push back deficit-reduction deadlines and making it perilous for politicians to wrap themselves in the flag of austerity.

Further signs that Europe's sovereign debt crisis has abated for the time being came on Thursday. Spain managed to sell 803 million euros of bonds maturing in 2029, 2040 and 2041 at yields lower than at previous sales.

Still, Business Insider reports that Société Générale is warning of another "Eurozone shockwave" in the spring.

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