Eurozone unemployment hits record high

(AP) LONDON - Record high unemployment for the 17 countries that use the euro is set to increase the pressure on Europe's leaders to switch from a focus on austerity to a pro-growth strategy to stop the region from moving deeper into recession.

Unemployment across the 17-member eurozone rose by 169,000 in March, official figures showed Wednesday, taking the rate up to 10.9 percent - its highest level since the euro was launched in 1999.

The rate was up from 10.8 percent in February and 9.9 percent a year ago, and reflects the downturn in the eurozone economy as governments pursue tough austerity measures to deal with their debts - nearly half the countries in the eurozone, including Spain and the Netherlands, are now officially in recession.

The seasonally adjusted figures from European statistics office Eurostat are likely to ratchet up the pressure on the region's policymakers to introduce more pro-growth measures alongside the spending cuts and tax increases they have already implemented in an attempt to fix their debt crisis.

"The question is how long EU leaders will continue to pursue a deeply flawed strategy in the face of mounting evidence that this is leading us to social, economic and political disaster," said Sony Kapoor, managing director of Re-Define, an economic think-tank.

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 this Sunday, has said he would renegotiate the eurozone's austerity-focused fiscal pact to include more pro-growth measures.

Austerity has so far been Europe's main policy response to the debt problems afflicting many countries. It's been pushed hard by Germany, Europe's biggest economy, as a way to convince markets and international investors that the region has a grip on the problem.

However, analysts have pointed out that Germany may change its stance as there are already indications that its economy may struggle this year.

April unemployment figures from Germany's statistics office showed a monthly rise of 19,000, only the second increase in the past 25 months.

And a survey of the manufacturing sector in the Europe's' export powerhouse economy pointed to grim times ahead. The monthly purchasing managers index - a gauge of activity levels - for the eurozone from financial information company Markit fell to 45.9 in April from 47.7 the previous month. Anything below 50 indicates a contraction in activity. Germany's index slumped to 46.2, its 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.

"There may be a growing consensus on the need for growth in the eurozone but with unemployment rising and industry slumping, a prolonged recession looks much more likely," said Jonathan Loynes, chief European economist at Capital Economics.

Spain officially entered into recession this week and is expected to face more difficulties in the months ahead as its conservative government pushes its austerity drive.

However, there are worries that it will struggle to meet its deficit-reduction targets at a time of recession - when an economy contracts, the debt burden increases in comparison to the size of the economy.

On top of this, Spain has the highest unemployment rate in the eurozone at 24.1 percent. The rate for the under 25s is an even more alarming 51.1 percent.

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 percent, with 51.2 percent of young people out of work.

The lowest unemployment rate in the eurozone was recorded in Austria, which has only 4 percent 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 percent.

This weekend, as Greece and France head to the polls, there are hopes - certainly among the ranks of the 17.4 million people unemployed in the eurozone - that there may be a change of strategy in Europe over how to deal with the two-year debt crisis that's already seen three countries bailed out and raised the specter of the break-up of the single currency.

"With the potential changing of political leaders, coupled with confirmation that nearly half of the eurozone is officially in recession, the strategy of continuing austerity is being widely challenged," said Gary Jenkins, managing director of Swordfish Research.

The unemployment rate across the wider 27-country European Union, which includes non-euro members like Britain and Poland, was 10.2 percent, unchanged from February but still higher than the 9.4 percent recorded a year before.