Eurozone, Cea via Creative Commons

Across the 17 European countries, there are 19.4 million people without a job and an additional 95,000 people became jobless since last year’s report. 

According to Eurostat, the European Commission’s statistics office, the unemployment rate has increased in most member states compared to previous year. The highest rates of joblessness were in Greece (27.0% in February 2013) and Spain (26.8%). 

“If current situation continues, I think we are likely to see an increase in some kind of rioting and disenchantment in the vein of London style riots,” predicted Henry Chang, a junior double majoring in political science and economics at the University of Pennsylvania. “But so far, I don’t see decrease in foreseeable future.”

High youth unemployment rates are especially concerning. People under the age of 25 make up more than two-third of the total unemployment rate in the EU with a staggering 3.6 million young people unable to find jobs. Since last year, 188,000 additional people became unemployed in Eurozone, raising the youth unemployment rate up to 24.4%.

The Eurozone’s high unemployment rate may further increase with Switzerland’s recent decision to enforced new quotas limiting the number of immigrant workers. Switzerland is not a member of the European Union and they hope that by halting the influx of EU workers they will be able to maintain their comparatively low unemployment. 

“By setting new quotas, Switzerland may claim decrease in its domestic unemployment rate in short-run,” said Matthew Ramirez, a junior economics student at USC. “However, in long-run, the quotas may affect Switzerland’s overall well-beings through creating hostile relationships with surrounding European nations.”

People blame increased taxes and reduced government spending for Eurozone’s economic decline, a problem that intensifies while private companies remain unable to fill in the vacuum created after the significant decrease in government spending.

To ease Eurozone’s recession-ridden economy, the European Central Bank removed a quarter of a percentage point off its benchmark interest rate and lowered it down to an all-time low of 0.5 percent. 

“Decreased interest rates mean it’s easier to borrow and invest that way, lower savings more spending, so potentially could help kick-start economy” said Chang. 

However, he is still unsure about how effective the implemented fiscal policy will prove to be. According to Chang, the success of the policy “depends on people being willing to put that money back into the economy.”

Kevin Chebrenchick, an economics and mathematics double at USC questions the impact that the bank’s policy on will have on American students. “Lowered interest rate may push down euro’s foreign exchange rate, which can potentially be beneficial to students considering to study abroad in Europe” Chebrenchick asserted. “But overall, I do not foresee any significant impact on USC student’s life in general.”

The European Central Bank is set to discuss alternative monetary policies to stimulate Eurozone’s economy in next week’s upcoming meeting.

Eurozone is experiencing its longest recession since the euro was launched in 1999. The six quarters of economic decline represent a longer recession than the one that followed the 2008 global financial crisis. Only time may tell how these economic woes will affect the rest of the world.