Unemployment Rate Will Remain High Even if Eurozone Recovers

• 03.24.2015, 21:55
•  Europe,  World

There is a concern about recovery of Eurozone economy because of the high unemployment rate. Although the European Central Bank has started its bond buying program, one in 10 workers in the area remains unemployed. Financial and debt crisis is the biggest burden for the zone countries that cause an increase of unemployment.

According to the ECB’s president Mario Draghi the easing of lending conditions will help creditors to push the demand up, which will bring new investments in the businesses. He also thinks that in the longer term this will increase the output, Ft reports.

Even if the businesses start to recover step by step giving more output, still the unemployment in the area will remain at 11.2 percent, so companies need more time to enlarge their business and to invite more employees. The forecast of ECB’s shows even after the €1.1 trillion driving to the market, still the rate of unemployment will stay to double digits. According to the same estimation 9.9 percent of the Eurozone’s labor market will be jobless by the end of 2017.

The ECB helps countries to have liquidity, which is good for investments. The Quantitative easing program gives chance to every country of the area to start new business or to enlarge their outputs. According to the Bank it is a matter of time to shrink the unemployment rate in the area. The reason to start the bond buying program in Eurozone was to help the area to reach economic growth and inflation at list 2 percent and the decrease of unemployment would be the consequence of the program’s working cycle.