NEW YORK (BNO NEWS) — The 17-nation euro area may lose 4.5 million jobs over the next four years if current policies continue unchanged in the region, the United Nations (UN) warned on Tuesday.
A report released by the International Labor Organization (ILO) outlined that further employment problems would increase the risk of social unrest and would further erode citizen’s confidence in their governments, the financial system and European institutions.
With labor markets in Europe not yet recovered from the late 2008 global crisis that hit the world economy, the report, called ‘Eurozone job crisis: Trends and policy responses,’ stressed that there is ‘mounting evidence’ that a prolonged labor market recession may be developing.
According to the report, the total employment in the euro area remains 3.5 million lower than before the crisis, and that employment has actually fallen since the start of the year in half of the area’s countries, resulting in a total of 17.4 million people looking for jobs in the region.
In addition, the report noted that it will be difficult to implement the reforms necessary to put the euro area back onto a path of stability and growth without a prompt policy turn in order to address the crisis and to regain the trust and support of workers and enterprises.
The report adds that by embracing a euro area growth strategy with jobs at its core, a recovery is still possible within a single-currency setting – however, to do this, austerity approaches need to be abandoned and countries must urgently reform their financial systems.
“Repairing the financial system, promoting productive investment, reinforcing effective employment programmes, maintaining social protection, fostering social dialogue and undertaking job-friendly fiscal plans would bring the Eurozone our of the austerity trap and pave the way for a sustainable recover with social cohesion,” the report states, adding that new regulation to prevent inappropriate financial practices is also needed.