Eurozone officials warned of an impending “social crisis” as millions of Europeans were set to lose their jobs as a result of the continent’s worst recession in 60 years. “The unemployment figures are of great concern ... We are heading towards a social crisis,” said Luxembourg Prime Minister Jean-Claude Juncker, who chairs the monthly meetings of the 16 countries that share the Euro. According to the European Commission’s latest estimates, some 8.5 million Europeans will lose their jobs over the next two years, with unemployment hitting 10.9 percent in the European Union and 11.5 percent in the Euro area in 2010.

Officials say the jobless rate is set to rise as a direct result of latest forecasts predicting a worsethan- expected four percent contraction in EU gross domestic product (GDP) this year. Earlier, the Commission also revised its GDP estimates for 2010, predicting a 0.1 percent drop rather than a small rise, as had been previously anticipated. Juncker said European employers had a responsibility “not to proceed with premature layoffs.” Noting that unemployment tends to hit first and foremost the weakest and most vulnerable members of society, Juncker urged EU governments to promote “more proactive” employment policies, for instance by providing additional training to those who lose their jobs.

“We really need to fight unemployment,” Juncker said. But “my feeling is that many politicians underestimate the extent of this phenomenon,” he added, after a planned EU social summit in Prague failed to attract by the bloc’s heads of state and government, as had been originally intended by the Czech presidency of the EU. EU governments have already pumped billions of Euro into their economies - about five percent of the bloc’s GDP over the next two years, according to officials in Brussels - in an unsuccessful bid to fend off recession, but Eurozone ministers insisted that there was no need for an additional stimulus package. “All ministers in the Eurogroup, including the European Central Bank, agree that the fiscal efforts launched by the Eurozone countries should be sufficient for the time being,” Juncker said. “We now want to see the effects on the ground,” the Luxembourg premier said.

MINISTERS AREN’T WORRIED

Such views were shared by ministers around the table, with Dutch Finance Minister Wouter Bos saying, “We should not panic every time new figures come up. We should just execute the decisions we have already taken, because I think they were pretty good.”Austria’s Finance Minister Josef Proell echoed that stance, pointing out that “we have a lot in the pipeline ... Many elements of the stimulus packages, many of our tax reductions will only start to have an effect in the coming weeks and months.” EU Economic and Monetary Affairs Commissioner Joaquin Almunia said ministers agreed that “we are now in the worst moment of the recession” and stressed that positive signals were beginning to be observed in the United States and Asia. And economic sentiment surveys in Europe “are improving,” Almunia said.

Almunia and Juncker further noted that additional stimulus packages were unlikely to succeed if governments did not first get credit flowing again by ridding their banks of toxic assets. At the meeting in Brussels, the finance ministers of Germany and Ireland both briefed their colleagues about their governments’ plans to overcome the credit squeeze, Juncker said. And though governments across the EU are set to smash the bloc’s selfimposed rule limiting budget deficits to 3 per cent of GDP as a result of the crisis, Almunia said there was “no doubt” that the bloc’s so-called Stability and Growth Pact would continue to apply. “We don’t want the burden of today’s policies to be borne by future generations,” Juncker said.

Just the mention of social problems has raised the ire of some ministers, as Greece’s Economics Minister, Yiannis Papathanasiou, on a panel about the economic problems in Brussels, disagreed with an assessment from a colleague that there was “social disharmony” in Greece because of economic problems, a reference to last December’s riots that began with protests over the killing of a teenager by a police officer but spiraled into weeks of fomented anger, some that protesters said was directed at the government, economic woes and the lack of a good job future. “We have no social harmony problems,” Papathanasiou said.

WORKER PROGRAMMES SOUGHT

The EU should boost training, innovation and worker mobility in a bid to stop unemployment running out of control in the current economic crisis, EU, business and trade union leaders said.“We cannot stop the crisis causing unemployment, but by acting now and in partnership ... we believe we can reduce job losses and help millions of people find new and better jobs,” European Commission President Jose Manuel Barroso told journalists. The meeting in Prague was hosted by the Czech government, current holder of the EU’s rotating presidency. It was attended by top representatives of the European employers’ association, EU trade unions, and the Swedish government, the next presidency holder.

It came three days after the European Commission, the EU’s executive, forecast that 8.5 million Europeans stood to lose their jobs in the next two years as a result of the economic crisis. And participants agreed that the EU’s member states should work harder to help companies adjust to global competition, and to help laid-off workers to find new jobs across the EU. “It is as important to ask where the new jobs are coming from as to ask how to preserve the jobs we have,” Swedish Prime Minister Fredrik Reinfeldt said. His country’s Economics Minister, Anders Borg, told a breakfast meeting of journalists in Brussels that there was a real danger of social problems as people feel left out of the bail-out packages that have gone to banks and businesses without helping working people.

“We are seeing deficits at levels we haven’t seen in many years,” he said of government’s emptying coffers and rising debts that have created an 11 percent jobless rate in the EU. He said remedies were needed quickly, “Otherwise we have a problem of social exclusion,” he said. The Commission will push for EU members to adopt a 10-point action plan for saving and creating jobs at a summit in Brussels on June 18- 19, including measures to match up job seekers with new posts across Europe, help entrepreneurs start up new businesses and retrain laid- off workers, Barroso said. While some of those measures have been on the EU’s agenda for years, the bloc must now bring them in because “the situation has changed dramatically (and) we need to focus on concrete responses,” Barroso said.

GET A JOB

Meanwhile, the EU’s business association, Business Europe, set out a 12-point plan to stave off mass unemployment. Those included concluding a world trade deal, boosting Internet access in Europe, making local authorities pay their bills on time, boosting research, cutting red tape and fighting protectionism. “Anything which smells of protectionism in the EU has to be fought back,” Business Europe head Ernest-Antoine Seillieresaid.

And the European Trade Union Confederation, which was also represented at the summit, set out its own five-point plan for protecting Europe’s workers, in what its secretary general, John Monks, called a “new social deal” for the continent. That plan called on the EU to commit one percent of its economic output to job creation, research and innovation, and to guarantee stronger and longer workers’ rights, better pay and a “major increase” in government welfare spending.

“It’s very important that the EU has a vigorous response to the crisis, because otherwise people will look nationally, and that could lead to nationalism ... and damage the EU,” Monks said. The various proposals are now set for debate in the EU’s 27 member states in the run-up to the bloc’s June summit. The June meeting will not be chaired by former Czech Prime Minister Topolanek, whose government fell on March 24 and whose administration disbanded last week.

But the fallen premier was undaunted by the impending end of his premiership, pointing out that he was “going to lose my post as prime minister, but I won’t be out of a job.” He is widely tipped to lead his Civic Democrat party into snap national elections in October. Asked by the German Press Agency Deutsche- Presse-Agentur (dpa) what his message was for the millions of Europeans facing redundancy, Topolanek said, “If you look for work, you’ll find it, and I think that applies to everybody.”

PAIN IN SPAIN

The hardest hit in the EU has been Spain, the world’s most popular tourist attraction, but where workers aren’t working and unemployment has hit the once-unthinkable rate of 17.4 percent, up from 13.9 percent in the last quarter of 2008, putting the number of jobless people at four million. Officials pointed the finger of blame at the crunch caused by inexpensive credit and uncontrolled and unregulated growth in the real estate market, particularly along the desirable shorelines, where rows of condos sit empty. Spain’s unemployment rate was twice that of the EU average, the National Statistics Institute said and the 802,800 increase in the ranks of the jobless in the first quarter was the largest increase in more than 30 years. “These figures are bad and worse than expected,” Finance Minister Elena Salgado said. The sharp quarterly increase was a sign of “how severe and how deep the crisis is,” she said.