Striking Greek shipyard workers from Eleusina, Perama and Skaramangas… (Louisa Gouliamaki / AFP/GettyImages )
WASHINGTON -- The European debt crisis could trigger the loss of 4.5 million more jobs over the next four years if national leaders don't take steps to repair the financial system and help job seekers, a United Nations agency is warning.
The sharp rise in unemployment from already record-high levels would endanger not only Europe's economy but the rest of the world's as well, said the UN's International Labour Organization.
The euro zone nations already have 3.5 million fewer jobs than they did before the financial crisis hit in late 2008, bringing the total number of unemployed to 17.4 million as of April, the organization said in a report issued Tuesday.
The unemployment rate hit an all-time high of 11.1% in May.
Without bold action to address the economic fallout from the debt crisis, the number of unemployed in the euro zone could soar to nearly 22 million over the next four years, the labor group said.
“It’s not only the euro zone that’s in trouble. The entire global economy is at risk of contagion,” said Juan Somavia, the ILO's director-general. “Unless targeted measures are taken to increase real economy investments, the economic crisis will deepen and the employment recovery will never take off."
Since 2010, unemployment has risen in more than half of the euro zone's 17 countries. While the problems have hit southern Europe harder, the labor market is showing signs of stalling in healthier economies, such as Germany and Belgium, the report said.
The group had several recommendations for reversing the surge in joblessness.
It said euro zone leaders needed to help the job market by repairing the financial system to help get credit flowing to small businesses. Corporate shareholders should take the hit for financial bailouts, reducing the need for austerity measures that have cost government jobs.
And the euro zone should launch a special effort to reduce the high rate of unemployment among young people, ages 15-24. The group called for a program similar to the "youth guarantees" offered in Nordic countries, in which governments commit to education, training and job placement assistance to targeted groups of unemployed.
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Think 8.2% unemployment is bad? It's a record 11.1% in Europe