The impact of EMU on European unemployment

Persistent unemployment is the top social and economic problem of most EU countries. Today, the unemployment rate in most EU countries is above ten percent and, although unemployment has decreased during expansions, the average EU unemployment rate within each cycle has increased since the early seventies. Although unemployment evolutions have been to some extent similar in EU countries, there are some outliers. On the one side, Portugal, Austria, the UK, the Netherlands, and Luxembourg, which have unemployment rates close to or below seven percent, are the 'low unemployment' countries. On the other side, Spain, with roughly 20 percent unemployment, and Finland, whose unemployment rate is close to 15 percent, are the extreme examples of the EU unemployment 'disease'. Participation rates, the incidence of unemployment among some population groups (the young, females, and low-skilled workers), and the duration of unemployment spells also vary across EU countries. This variation suggests that there may be some peculiarities in the unemployment situation of these countries. However, the overall situation regarding unemployment is that most of these countries are 'converging' to unemployment rates close to or above ten percent.