Eurozone Crisis: Joblessness Hits Record High

Unemployment in the 17 countries that use the euro has reached a record high,reflecting the strength of the eurozone's spreading recession.

Official figures show joblessness across the single currency bloc rose by 169,000 in March, taking the rate up to 10.9 % - its highest level since the euro was launched in 1999.

The number of unemployed workers across the region rose by 169,000 to a total of 17.4 million, the agency Eurostat said.

The rate was up from 10.8% in February and 9.9% a year ago and comes as nearly half of the eurozone's countries, including Spain and the Netherlands, are officially in recession.

The eight countries from the single currency that are in recession are joined by three from within the EU but outside the euro bloc, including the UK.

Separate figures released on the same day revealing that the eurozone's manufacturing sector contracted at the sharpest pace in almost three years in April pointed to more grim times ahead.

Activity levels in Germany, Europe's biggest economy, slumped to their lowest level since the summer of 2009 when the global economy was in its deepest recession since World War II following an acute banking crisis.

The latest data is likely to increase pressure on Europe's leaders to switch from a focus on tough austerity measures to deal with their debts to pro-growth strategies that try prevent the region's downturn from worsening.

European Central Bank president Mario Draghi has spoken of the need for a "growth pact" in Europe and Francois Hollande, who is tipped to beat President Nicolas Sarkozy in France's presidential runoff on Sunday, has said he would renegotiate the eurozone's austerity-focused fiscal pact to include more pro-growth measures.

Speaking on Jeff Randall Live, Bronwyn Curtis, senior adviser at HSBC Global Banking and Markets said: "Nobody wants to put up with austerity, let's face it. It's much more fun to have growth and spend."

Talking about the impact of the upcoming elections in France and Greece, she said: "I think it will unnerve the markets if we have a number of things, which we're going to have on the political agenda going forward, despite LTRO (long-term refinancing operations), despite slightly better data in Germany."

Spain, which officially went into recession earlier this week and is facing widespread protests against its government's austerity drive, has the highest unemployment rate in the eurozone at 24.1%. The rate for the under 25s is an even more alarming 51.1%.

Greece was close behind, though its figures date back to January.

The country, which has had to receive two massive international bailouts to avoid a messy default on its debt payments, has a general jobless rate of 21.7%, with 51.2% of young people out of work.

In a sign of divergence across the eurozone, the lowest unemployment rate was recorded in Austria, which has only 4% of its working population out of work.

The Netherlands, which saw its government collapse last week over disagreements on austerity measures, was not far behind at 5%, while joblessness in Germany stood at 5.6%.

:: Credit rating agency Standard & Poor's today lifted crisis-hit Greece out of "selective default" status, after a bond swap reduced the eurozone country's massive debt pile by a third.

However, ahead of elections in Greece on Sunday and questions marks over the ability of a new government to press ahead with its austerity measures, the agency cautioned that country's "sovereign debt burden remains high" with "significant stresses on Greece's creditworthiness."