MercoPress. South Atlantic News Agency

ILO paper warns of social unrest risk in the Euro-zone as unemployment keeps climbing

Unemployment at unprecedented levels in the European Union means the risk of social unrest is on the rise says the UN's International Labour Organization Miguel Angel Malo who argues that EU politicians need to abandon austerity and embrace job creation.

“When unemployment is as high as it is right now, as poverty and welfare protection become worse, then the danger of social unrest grows along with it” said Malo, Economics professor in Salamanca, Spain, and consultant at the International Labour Organization (ILO), a UN agency seeking to promote labor rights.

Malo co-authored for ILO a paper with an unsettling thesis: the likelihood of social unrest is increasing, or at least it is becoming far more likely in certain areas of Europe.

According to the report, 26.3 million Europeans are unemployed - 10 million more than just before the outbreak of the crisis in 2008. In 22 of the EU 27 countries, the labor market is in worse condition than before the crisis begun. Just five countries have higher levels of employment than in 2008: Austria, Germany, Hungary, Luxembourg and Malta.

EU unemployment now stands at 10.9%, wrote Malo and his colleagues, which is 4.1 percentage points more than just five years ago. In the 17 countries that have adopted the Euro as their currency, unemployment has risen faster than outside it, reaching a historic high of 12% in February 2013.

With little happening in the job market, unemployed EU citizens are now competing for fewer and fewer positions.

The conclusions the report draws are even more interesting than the bare statistics: if one looks at who are the losers it becomes clearer exactly why the ILO is warning of unrest. The losers are made of three groups which have scarcely any access to the labor market.

The first group is young people: one in four youths - a group that includes those who have finished higher education but have not found work - is currently unemployed. In Spain and Greece it's more than half, 56% and 57%. In 26 of 27 countries, youth unemployment has risen since the beginning of the crisis. Germany is the only exception.

The second group is the long-term unemployment, whose numbers have nearly doubled, from 5.8 million in 2008 to 11 million today.

And the third group is those with few qualifications: “unskilled labor” has been hit particularly hard by negative economic developments, much more so than skilled workers or university graduates.

As to whether Europe will finally “blow its top,” Martin Dieweld, professor of Sociology at Germany’s Bielefeld University is not convinced.

“I don't see any sign of that at all with relation to Europe”. However he did not rule it out in countries particularly hard hit by the financial crisis, such as those on the Mediterranean.

The risk of unrest cannot be measured precisely, but the ILO estimates that it's currently 12 percent higher in the EU than it was before the crisis. In order to reach this conclusion the organization developed its own evaluation procedure based on the views of those participating in surveys. ”Our procedure is tied directly to people's living conditions“ says ILO expert Malo.

As a basic rule ILO believes that the worse the EU economic and political position becomes, the higher the risk of social unrest. That means the potential for social unrest has increased in countries such as Cyprus, Greece, Italy, Portugal, Spain, Slovenia the Czech Republic. Simultaneously, risks have lowered in Germany, Finland, Belgium, Slovakia and Sweden.

However Diewald believes that risk should be judged on a country-by-country basis. Some countries have shown few economic problems so far and citizens in crisis-struck countries are reacting differently.

In Greece, protests have already resulted in deaths. In Italy and Spain, by comparison, demonstrations have remained peaceful. ”More and more, we're observing that well-educated youths in well-off countries are leaving,“ Diewald says. ”It's more 'exit' instead of 'voice,' to quote the old line from sociologist Albert Hirschman.“

In order to avoid violent unrest, the ILO suggests that the most battered countries in the Euro zone change course. Austerity measures, of which the ILO has been outwardly critical since the outset, should be replaced by a concentrated attempt to improve the job market. ”Jobs must be as much a target as budget discipline or other economic goals,” says Malo.

Among ILO demands are calls for wages and salaries that should at the very least be stable, and hopefully with increase prospects. That would allow consumer demand to be released, injecting cash into the economy. ILO would also like more credit for small and medium-sized businesses as well as labor market programs and employment guarantees for young people.

According to the latest Eurostat release Eurozone unemployment reached 12% last February, which is 1.01 percentage points higher than a year ago.

The highest unemployment rates in February were found in Spain with 26.3% and neighbour Portugal, with 17.5%. Greece was at 26.4% but the figure is for December, the latest available. The lowest rates were 4.8% in Austria and 5.4% in Germany, Europe's largest economy.

Regarding youth unemployment, Eurostat said that the jobless rate for under-25s ran at 23.9% in the Euro-zone and 23.5% in the EU. Among the countries with the highest youth jobless levels, Spain was on 55.7%, followed by Portugal on 38.2% and Italy with 37.8%. Greece has the highest with 58.4% but it is a December index.

The 12% in February is considered a warning light since the official EU forecast for the twelve months of 2013 is 12.2%.