LISBON: Despite the risk of aggravating the recession and unemployment, Portugal's government is wagering that following the austerity prescribed by its creditors will help it regain market confidence and avoid a second bailout."That method isn't great but a change of strategy could only be decided at the European level," said Rene Defossez, a bond analyst at Natixis investment bank.
"Portugal doesn't have the political wherewithal to abandon austerity policies," he told AFP.
Portugal's Constitutional Court last week ruled that several measures in the government's 2013 budget were unlawful, which will make it difficult for the government to reduce the public sector deficit to 5.5 per cent of gross domestic product to keep it eligible for funds under its 78-billion-euro bailout from the European Union and International Monetary Fund.
Standard Poor's rating agency warned that further EU and IMF support would be jeopardised were the Portuguese government unable or unwilling to abide by its programme commitments.
The court ruling against the scrapping of a bonus 14th month of salary for civil servants and retirees, as well as some cuts to unemployment and sickness benefits, means that the government of Prime Minister Pedro Passos Coelho is scrambling to plug a 1.3 billion euros gap.
Standard Poor's said it will be challenging for the government to identify such measures at short notice. This increases the risk that the 2013 fiscal target will be missed.
Coelho has called for further reductions in public spending instead of the raising of taxes, with social security, health and education likely to bear the brunt of the additional cuts.
The finance minister decided Tuesday to freeze all non-essential spending to try to help close the gap.
Criticism of the austerity policy which has triggered the deepest recession since 1975 and unemployment of 16.9 per cent has been mounting, and not only from the centre-left opposition and labour unions, but also from employers.
But Coelho has pushed ahead with austerity, warning the other options are worse.
"The alternative to austerity would lead us to another bailout, prolonging and deepening the sacrifices" on Portuguese citizens, the prime minister told the nation on Sunday.
"Reducing the deficit is a indispensable condition for keeping Portugal in the eurozone," he added.
Portugal's international creditors have also kept up the pressure.
Auditors from the so-called troika of the EU, IMF and ECB (European Central Bank) now plan a special visit to Portugal this month, when their next scheduled review is for May.
The European Commission also warned Portugal that the country must respect all the conditions of its rescue programme if it wants to renegotiate the repayment deadline on its bailout loans.
Spreading out the repayment of the loans, which could be discussed at a meeting of EU finance ministers in Dublin this weekend, could provide a big boost for ensuring the sustainability of Portuguese state finances.
That would make it easier for the country to achieve the goal of funding itself exclusively on the bond markets when the rescue programme ends in June 2014.
The determination demonstrated by the Portuguese government gives it good chances of extending the maturities of the rescue loans which would make it plausible again for the country to launch its first long-term 10-year bond issue since the bailout, said BPI bank economist Paula Carvalho.
Portugal made an early return to the bond markets with a placement of medium-term debt in January, raising 2.5 billion euros at a rate of 4.891 per cent.
On the secondary market on Tuesday, the yields on Portuguese 10-year bonds rose to 6.453 per cent from 6.415 per cent on Monday, a rate at which many economists would still consider too expensive for a country generating no growth.
According to government forecasts, the Portuguese economy will shrink by 2.3 per cent this year and the unemployment rate will climb over 18 per cent.
"Portugal is temporarily relegated from the camp of 'good students' but it remains closer to Ireland than to the case of Greece," added Carvalho.
Portugal
With back against the wall, Portugal pushes on with austerity
Pakatan manifesto, promises to be reneged
Pakatan manifesto, promises to be reneged
KUALA LUMPUR: Tun Dr Mahathir Mohamad said the recently unveiled Pakatan Rakyat manifesto advocates things which have bankrupted Europe and the USA.
He said the Pakatan manifesto is all about reducing Government revenue and increasing Government spending and this, he added, is to be achieved by “lowering taxes, reducing the number or tax-payers by raising the tax-free allowances, doing away with tolls, etc.”
On the other hand, Dr Mahathir added, the salary bill (of civil servants) would be increased due to the increase in minimum wage, payment for the education of everyone, build and maintain all roads and highways.
“With about 1.1 million employees, Government salaries bill is very big. By increasing the minimum wage to RM1,100.00 not only will those drawing less than the minimum wage get an increase, but those above must also be given wage increases to maintain their status as superiors to those below them.
“The salaries of all grades will have to be increased in order to do this. It is not about raising the salaries and wages of those below the minimum wage only. This would be in addition to the RM2 billion due to the recent rise of the minimum pay to RM900.00.
The foiurth Malaysian Prime Minister also took a dig at Pakatan’s Mentri Besar of Selangor Tan Sri Khalid Ibrahim who said that a manifesto is not a promise.
Obviously, Dr Mahathir said Pakatan is preparing the renege on its manifesto.
“This will not be surprising. In Selangor the Pakatan Government has failed to honour its promise on free water, allowance for widows and many others.
“The Pakatan manifesto is obviously meant to hoodwink the electorate,” he said.
Following is the full article. It has also appeared on the New Straits Times (“A manisfesto that hoodwinks voters” – 1 March, 2013):
The Pakatan Manifesto by Tun Dr Mahathir Mohamad
“Pakatan has unveiled its manifesto. It is all about reducing Government revenue and increasing Government spending.
This is to be achieved by lowering taxes, reducing the number or tax-payers by raising the tax-free allowances, doing away with tolls, etc. On the other hand the salary bill will be increased due to the increase in minimum wage, payment for the education of everyone, build and maintain all roads and highways.
With about 1.1 million employees, Government salaries bill is very big. By increasing the minimum wage to RM1,100.00 not only will those drawing less than the minimum wage get an increase, but those above must also be given wage increases to maintain their status as superiors to those below them.
The salaries of all grades will have to be increased in order to do this. It is not about raising the salaries and wages of those below the minimum wage only. This would be in addition to the RM2 billion due to the recent rise of the minimum pay to RM900.00.
The cost of education would also increase by more the RM 2 billion due to free education.
The repair and maintenance of highways would also run into several billions.
Currently the cost of petrol subsidies is about 18 billion. If petrol price is to be lowered then several more billions would be added to Government subsidy.
On the other hand revenues would decrease by several billions when taxes are reduced, lowering the number of people paying taxes and toll-free roads etc.
Revenue will also decrease as higher wages for business sector is bound to reduce profits and therefore taxes to be paid to Government. Some businesses may have to close down altogether or migrate to other countries. There will be less investment both foreign and domestic. And more unemployment.
At one time manufactured goods sold in Malaysia carry European brands. Today they are almost all from Japan, Korea and China. Except for German cars, all the motor vehicles on the roads are from Asian countries.
For decades the Europeans and Americans have been increasing wages and giving perks for their workers. The prices of their products increased accordingly and could not compete in the market. They lost the market.
But they keep on increasing their high living cost. Today they are facing an irreversible financial crisis. Greece, Spain, Portugal and even Italy are on the verge of bankruptcy or have become bankrupt. Even Britain and France are in financial trouble.
The U.S is also in deep financial trouble. It faces the need to reduce Governmental spending (sequestration) or to increase taxes.
Sequestration would mean less money for education, medicare, defence. The number of teachers would have to be reduced. Even the control towers at some airports would have to cease operations. Military bases, weapons and personnel would have to be reduced. An austerity programme would slow down growth and increase unemployment.
Like the Europeans, the Americans do not like to reduce their spending. They refuse to pay more taxes. In fact the rich are demanding for tax reduction.
The financial crisis in Europe and America is basically due to overspending. Until they cut back on their spending and increase taxes they will not recover.
The Pakatan manifesto advocates the very things which have bankrupted Europe and America. If Pakatan is responsible it should work out the cost.
It is not too difficult to do this as Government employees, their pay and their development and maintenance needs are known. We know the number of people who will get the pay increase, we know the cost of maintaining educational and health institutions, we know the cost of maintaining roads and highways, we know the cost of development. Instead of merely commenting, the economists and financiers should work out the incomings and outgoings. Then the people will understand what the manifesto really represents.
But on the other hand Tan Sri Khalid, MB Selangor has said that a manifesto is not a promise. Obviously the Pakatan is preparing the renege on its manifesto.
This will not be surprising. In Selangor the Pakatan Government has failed to honour its promise on free water, allowance for widows and many others.
The Pakatan manifesto is obviously meant to hoodwink the electorate.”
Source: MOLE
Italy vote is blunt message against austerity
Italy vote is blunt message against austerity
BRUSSELS: Italian voters handed Brussels a “blunt message” against its austerity policies, analysts and politicians said Tuesday, but the EU executive said there was no other way out of Europe’s economic woes.
Just as the eurozone debt crisis seemed to be melting away, the threat of political instability in Italy due to an election stalemate in the European Union’s fourth largest economy revived fears of fresh financial turmoil in the months ahead.
Leaders across Europe called for the quick formation of a stable government and former Belgian premier Guy Verhofstadt, leader of Europe’s centrist parties, said stability was key “if we want to avoid a return to the worst of the eurozone crisis.”
“It is a very difficult result for the EU as a whole,” said Martin Schulz, the German Social-Democrat president of the European Parliament, delivering the first official response in Brussels to the vote. “What happens in Italy affects us all.”
Schulz said the Italian vote was a clear expression of dissatisfaction, a message that people are ready to make sacrifices but not at any cost.
Bernadette Segol, leader of the European Trade Union Confederation (ETUC), said the gains made by parties that campaigned against the EU’s austerity formula — around 57 per cent — was a new signal of alarm.
“Many people don’t understand that Europe can find money to save the banks but not to relaunch growth,” she told AFP.
The polls saw a massive vote for a new populist anti-austerity party which came a close third to centre-left Democratic Party leader Pier Luigi Bersani and former premier Silvio Berlusconi on the right.
The big loser was outgoing prime minister Mario Monti, who was drafted in to run a technocratic government in the debt-strapped country after Berlusconi was ousted at the height of the financial crisis in 2011.
Monti’s failure to secure more than one out of 10 votes despite backing from across Europe showed the rising levels of dissatisfaction with Europe’s belt-tightening drive, said Jan Techau, head of the Carnegie Europe think tank.
“Europe-critical politicians won votes,” he said.
Techau said Italy had seen the biggest gains in recent years in Europe for a populist party — the anti-establishment Five Star Movement, driven by deep and long-lasting exasperation with a corrupt political class.
“Italy is the first country that has gone for that message,” he said.
“So far European democracy has been resilient. The bigger risk is countries like Spain and Portugal that (are in) … recession and stay in recession for a long time.”
The EU executive admitted that “we clearly hear the message of concern expressed by Italian citizens”, facing 11.6 per cent unemployment this year — almost 40 per cent for under-25s — after 10.6 per cent last year.
But Italy had to stick to its pledges of budget cuts and economic reforms, said the European Commission.
“Italy has made commitments vis a vis the Commission and other member states, on the reduction of its deficit, on the reduction of its debt, and on a number of other pledges of structural reform,” said commission spokesman Olivier Bailly.
Putting the changes off now would only mean more pain and greater austerity later, he said, adding: “What if we had not done anything … what would be the size of the bill … in five year’s time?”
The Italian economy has been in the doldrums for several years and is expected to shrink 1.0 per cent this year after 2.2 per cent in 2012, according to the latest EU forecasts.
Its accumulated debt is forecast at 128.1 per cent of GDP this year, more than double the EU limit of 60 per cent.
Pascal Delwit of the European Studies Institute said that Italy’s vote against austerity would likely trigger fresh efforts to rethink current policy.
“This message is primarily addressed at Germany, which orients policy in the eurozone,” he said. But with Chancellor Angela Merkl facing elections in the autumn, there may be little to no change till then, he said.
Source: MOLE
World's biggest food firms embroiled in horsemeat scandal
World’s biggest food firms embroiled in horsemeat scandal
PARIS: The world’s biggest food company, Swiss-based Nestle, and the world’s top beef producer, JBS of Brazil, were Tuesday the latest in a long list of firms to be caught up in Europe’s spiralling horsemeat scandal.
Their involvement in the fast-moving drama marked another milestone in a scandal that has seen supermarket chains across Europe pull from their shelves millions of “beef” products that are thought to contain horsemeat.
Nestle announced it was removing two ready-to-eat meals — beef ravioli and beef tortellini — from supermarket shelves in Italy and Spain after tests found traces of horse DNA in the products.
A Nestle frozen lasagne product made for the catering business was also being withdrawn from sale in France and Portugal because traces of horsemeat were found in them.
The firm insisted there was no food safety issue but said the tainted products breached the one per cent threshold the British Food Safety Agency uses to indicate likely adulteration or gross negligence.
The horse DNA was found in products made with meat supplied by German firm H.J. Schypke, Nestle said in a statement late Monday.
JBS of Brazil, which used H.J. Schypke as a subcontractor, meanwhile said in a statement that it would stop buying European meat until confidence is restored in the European beef supply chain.
It sought to distance itself from the scandal, saying Schypke was “not in any way part of the JBS Group” and adding that “no case of co-mingling of species has been identified in products produced in or at JBS factories.”
Schypke on Tuesday denied any wrongdoing.
“We buy all raw materials already chopped up, fresh or frozen, from certified suppliers. … We would like to point out expressly that H.J. Schypke has at no time purchased horsemeat,” it said.
The firm said it greatly regretted the current case and vowed to carry out genetic tests on raw meat in future.
German authorities meanwhile announced on Tuesday that 24 out of 360 official tests carried out on meat had revealed traces of horsemeat.
“It’s too early to assign blame unilaterally… the authorities are working in the federal states to work out who should take responsibility,” consumer affairs ministry spokesman Holger Eichele told reporters.
But he said the authorities would eventually be able to tell who were the main culprits and co-culprits once the tests of ready meals and inspections of slaughterhouses and food production centres were complete.
On Monday, German discount chain Lidl pulled ready-made meals from the shelves of its Finnish, Danish, Swedish and Belgian stores as it also confirmed the presence of horsemeat.
The French firm that sparked the Europe-wide food alert, by allegedly passing off 750 tonnes of horsemeat as beef, was on Monday allowed to resume production of minced meat, sausages and ready-to-eat meals.
But Spanghero, whose horsemeat found its way into 4.5 million “beef” products sold across Europe, will no longer be allowed to stock frozen meat, officials said.
Upholding that ban means it cannot act as middleman between slaughterhouses and food-processing companies, the situation which allegedly allowed it to change labels on horsemeat from Romania and sell it on as beef.
The firm’s sanitary licence was suspended last Thursday after it was accused of passing off huge quantities of mislabelled meat over a period of six months.
On Tuesday, a source close to the investigation told AFP that authorities had raided Spanghero’s headquarters in southern France.
“The judicial phase began this afternoon with investigations, searches and on-site interviews,” the source said.
A union representative said investigators spoke to four employees.
Concerns about horsemeat first emerged in mid-January when Irish authorities found traces of horse in beefburgers made by firms in Ireland and Britain and sold in supermarket chains including Tesco and Aldi.
The scandal then intensified when French firm Comigel alerted Findus earlier this month to the presence of horsemeat in the meals it had made for the food giant and which were on sale in Britain.
Since then, supermarket chains have removed millions of “beef” products as tests are carried out to detect horsemeat, which is eaten in many European countries but considered taboo in Britain.
Horsemeat in “beef” dishes has now been confirmed in products found in Britain, Ireland, France, Austria, Norway, The Netherlands, Germany, Italy, Spain, Portugal and Belgium.
Source: MOLE
Ryanair ordered to cough up for volcano chaos
Ryanair ordered to cough up for volcano chaos
LUXEMBOURG: The European Court of Justice on Thursday ordered the Irish airline Ryanair to compensate passengers whose travel plans were thrown into chaos by the 2010 eruption of an Icelandic volcano.The court was ruling on a case brought by an Irish citizen that has implications for travellers on all carriers in European Union airspace should unpredictable events wreak havoc with schedules in the future.
Its decision could also have an impact on prices in the budget market.
The judges said that when flights are cancelled in extraordinary circumstances such as the eruption, which sent a giant ash cloud floating across Western Europe and beyond, even low-cost airlines had an obligation to lodge and feed passengers before they could finish their journey.
Denise McDonagh brought the case to a Dublin court after her flight from Faro, Portugal to Dublin was cancelled. She had a five-day wait before flights between Ireland and the rest of the continent were re-established and a seven-day delay before she got home.
The Icelandic volcano erupted in April 2010, spewing a massive cloud of ash that caused the planet's biggest airspace shutdown since World War II, with more than 100,000 flights cancelled and eight million passengers stranded.
In an experience familiar to many passengers, the company refused to cover any of McDonagh's expenses during the delay, but the judges ordered Ryanair to pay her almost 1,330 euros ($1,800) to cover costs incurred during the week in limbo.
Irish judges had asked the EU's top court to rule on whether the volcanic eruption constituted extraordinary circumstances, and the court said there was no category of particularly extraordinary that would allow carriers to be exonerated from their obligations.
Further, the judges said that there should be no time limit on claims for such compensation, exposing Ryanair especially to a substantial bill -- the other big airlines are understood to have mostly dealt with their own backlogs of compensation claims from travellers.
Source: MOLE
Ryanair ordered to cough up for volcano chaos
Ryanair ordered to cough up for volcano chaos
LUXEMBOURG: The European Court of Justice on Thursday ordered the Irish airline Ryanair to compensate passengers whose travel plans were thrown into chaos by the 2010 eruption of an Icelandic volcano.The court was ruling on a case brought by an Irish citizen that has implications for travellers on all carriers in European Union airspace should unpredictable events wreak havoc with schedules in the future.
Its decision could also have an impact on prices in the budget market.
The judges said that when flights are cancelled in extraordinary circumstances such as the eruption, which sent a giant ash cloud floating across Western Europe and beyond, even low-cost airlines had an obligation to lodge and feed passengers before they could finish their journey.
Denise McDonagh brought the case to a Dublin court after her flight from Faro, Portugal to Dublin was cancelled. She had a five-day wait before flights between Ireland and the rest of the continent were re-established and a seven-day delay before she got home.
The Icelandic volcano erupted in April 2010, spewing a massive cloud of ash that caused the planet's biggest airspace shutdown since World War II, with more than 100,000 flights cancelled and eight million passengers stranded.
In an experience familiar to many passengers, the company refused to cover any of McDonagh's expenses during the delay, but the judges ordered Ryanair to pay her almost 1,330 euros ($1,800) to cover costs incurred during the week in limbo.
Irish judges had asked the EU's top court to rule on whether the volcanic eruption constituted extraordinary circumstances, and the court said there was no category of particularly extraordinary that would allow carriers to be exonerated from their obligations.
Further, the judges said that there should be no time limit on claims for such compensation, exposing Ryanair especially to a substantial bill -- the other big airlines are understood to have mostly dealt with their own backlogs of compensation claims from travellers.
Source: MOLE
Portugal cracks down on legal highs
Portugal cracks down on legal highs
LISBON: Innocuously marketed as incense or bath salts, synthetic drugs are increasingly popular among Portuguese youths looking for a legal high, despite a ban on selling them to minors.
Adverts for these substances, responsible for a growing number of hospitalisations, are plastered around this city and have now caught the eye of health authorities who have decided to wage war against the dozens of so-called smartshops selling them.
The proliferation of these synthetic drugs, which reproduce the effects of illicit drugs like cannabis, cocaine or ecstasy, and of hallucinogenic plants, has already created problems for other European legislators, and Portugal is the latest to launch a crackdown.
The country introduced legislation in 2001 that decriminalised drug use across the board, a move that health experts credit in part for the decline in drug addiction. Users are now forced to appear in front of special addiction panels rather than a criminal court.
Now, legislators are turning their attention towards synthetic drugs, with officials on the popular tourist archipelago of Madeira the first to have raised concerns over their use in the country.
“Local authorities sounded the alarm because the consumption of these psychoactive substances has increased dramatically in a short amount of time, with serious consequences to boot,” national health director Alvaro Carvalho told AFP.
Since January 2012, four people have died and 170 others have needed hospital treatment for psychotic episodes and cardiac complications, he added.
This month, the regional government enacted a law banning the sale of any psychoactive substances listed by the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA), leading to the closure of the island’s smartshops.
National legislators plan to also submit a bill on the subject in the coming weeks in a bid to curb consumption, taking their lead from measures put forward by other European countries such as Britain and Italy.
Compounding the problem, however, is the fact that the goal posts keep moving: synthetic drug makers regularly switch the chemical make-up of their products as each new substance is outlawed.
The EMCDDA has detected 57 new substances since the beginning of the year alone.
‘False sense of security’
In this city a dozen smartshops are scattered around the bars and clubs of the trendy Bairro Alto and Cais de Sodre districts, with water pipes and rolling papers on display.
Interspersed among these items are the legal drugs: small packets of eye-catching and colourful designs that promise exciting evenings at competitive rates starting at around 10 euros each.
“Our customers are above all looking for legal alternatives they can get without running the risk of getting attacked or arrested,” said one smartshop owner, who wished to remain anonymous.
But according to Joao Goulao, chairman of the EMCDDA, “the over-the-counter availability of these substances gives a false sense of security, which is really not the case”.
A growing number of hospitalisations — often of users in a critical condition — has been seen and medical personnel struggle to respond due to their lack of knowledge of the substances, added Goulao, who was among the architects of Portugal’s decriminalisation law.
For Marco, a regular cannabis user in his thirties who first bought from a smartshop two years ago when he found it harder to buy from his usual sources, the effect of synthetic marijuana is much stronger than that of the illicit kind.
“I’ve experienced three episodes of a drop in blood pressure in six months, while that only happened once in several years of doing real cannabis,” he said.
Given the official crackdown on the substances and increased media coverage of their consequences, some smartshop owners are planning their next move.
“Once the products are banned, we will respect the law and adapt,” said one owner who wished to remain anonymous and kept his post-ban plans secret.
Marco, for his part, voiced concern over the potential repercussions of such a law.
“Those who experimented with these drugs when they were legal, what will they do now? Move on to illicit drugs?”
Source: MOLE
Educated immigrants discriminated against for Swiss jobs
Educated immigrants discriminated against for Swiss jobs
GENEVA: Immigrants with advanced education face discrimination when looking for work in Switzerland and are three times more likely than Swiss nationals to be unemployed, according to a study released Thursday.
“Some highly qualified immigrants face discrimination on the Swiss labour market, even when they have a Swiss education,” Switzerland‘s Federal Commission against Racism (CFR) lamented in a statement, citing a study conducted at the University of Basel.
People originally from Turkey, the Balkans and Portugal were especially discriminated against in employment, according to the study.
A full five per cent of highly qualified foreign nationals living in Switzerland were unemployed, compared to just 1.5 per cent of Swiss citizens with the same level of education, the study found.
The CFR called on employers to work to change that trend, recommending that they take an integrated approach of diversity.
“Companies that aim for diversity show better results,” it said, insisting that employers should ensure that all job-seekers are treated equally by allowing them to remain anonymous during the application procedure.
Switzerland counts around 1.8 million immigrants, who make up nearly 23 per cent of its 7.95-million strong population.
Source: MOLE
Educated immigrants discriminated against for Swiss jobs
Educated immigrants discriminated against for Swiss jobs
GENEVA: Immigrants with advanced education face discrimination when looking for work in Switzerland and are three times more likely than Swiss nationals to be unemployed, according to a study released Thursday.
“Some highly qualified immigrants face discrimination on the Swiss labour market, even when they have a Swiss education,” Switzerland‘s Federal Commission against Racism (CFR) lamented in a statement, citing a study conducted at the University of Basel.
People originally from Turkey, the Balkans and Portugal were especially discriminated against in employment, according to the study.
A full five per cent of highly qualified foreign nationals living in Switzerland were unemployed, compared to just 1.5 per cent of Swiss citizens with the same level of education, the study found.
The CFR called on employers to work to change that trend, recommending that they take an integrated approach of diversity.
“Companies that aim for diversity show better results,” it said, insisting that employers should ensure that all job-seekers are treated equally by allowing them to remain anonymous during the application procedure.
Switzerland counts around 1.8 million immigrants, who make up nearly 23 per cent of its 7.95-million strong population.
Source: MOLE
Grim all over as eurozone jobless soars further
BRUSSELS: Jobless numbers shot up to a record 18.2 million in the eurozone in August, official data showed Monday after a sharp revision to earlier figures highlighted the damage caused by the debt crisis.The grim 18,196,000 headline jobless figure for August released by Eurostat was the highest since records began in 1995 and equated to a massive jump of 2,144,000 in the last 12 months.
In a statement, the European Union agency said the August unemployment rate of 11.4 per cent was stable compared to July, with just a 34,000 increase.
However, the July figures had been revised up to add 160,000 to the jobless count for the month, giving the same 11.4 per cent unemployment rate, a Eurostat spokesman confirmed.
The eurozone is faring far worse than its main international economic rivals. Japan's unemployment rate was 4.1 per cent in August according to Eurostat, which uses complicated data modelling to draw comparisons, while the United States was at 8.1 per cent.
The eurozone also suffered more relative to the 27-state EU single market, which includes Britain and Poland.
"Compared with August 2011, unemployment rose by 2.170 million in the EU 27 and by 2.144 million in the euro area," Eurostat said
The European Commission had warned recently that eurozone jobless levels were becoming critical and would pose a serious threat to social cohesion without concerted action.
Since then, Spain, Portugal and Greece have each seen mounting street protests against government austerity programmes, with the strains stoking separatist sentiment in several countries.
Spain retained the highest unemployment rate in August, of 25.1 per cent for all adults, and 52.9 per cent for under-25s.
Greece had the highest youth unemployment rate -- 55.4 per cent -- and was only narrowly behind Spain overall with 24.4 per cent of adults out of work.
Germany's rate was 5.5 per cent, with neighbouring Austria recording the lowest at 4.5 per cent.
