Forex Flash: EMU’s unemployment rate to peak at 11.5%

Forex Flash: EMU’s unemployment rate to peak at 11.5%

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Forex Flash: EMUs unemployment rate to peak at 11.5% - ING Bank

FITITOL--> FXstreet.com (Barcelona) - The unemployment in the Eurozone has risen to a fresh 15-year high of 10.9% after 11 monthly rises of the indicator, totaling 169000 jobless in the EZ. “The figures clearly highlight the diverging economic paths of the Eurozone and the US, where unemployment is falling”, wrote ING Bank analyst Martin van Vliet, expecting talks about the long-overdue growth pact for the EZ.

Also noted is the duality between Germany’s jobless rate and the peripherals Spain, Portugal and Italy increasing to 24.1%, 15.3% and 9.8%, respectively. “The depressingly high unemployment rates in Southern-Europe are partly caused by structural factors, but also provide a clear indication of the short-term economic pain inflicted by the draconian austerity programmes”, adds van Vliet, that expects EMU’s unemployment rate to peak at 11.5%, before softening as the EZ emerges from the double dip recession in H2 2012.

The great challenge is for the ECB, as its †œone-size-fits-all” policy is hurting Germany as inflation mounts. However, higher inflation in Germany is an opportunity for the peripherals to “restore competitiveness”.