European unemployment at its highest since introduction of the Euro

European leaders are being called to focus less on unpopular austerity measures and turn their attentions to stimulating economic growth. The 17 countries that use the euro face record high unemployment and a recession that is spreading across the region. Eurozone unemployment rose by 169,000 in March, taking the rate up to 10.9 percent, its highest level since the euro was launched in 1999.

LOS ANGELES, CA (Catholic Online) - The seasonally adjusted rate was up from 10.8 percent in February and 9.9 percent a year ago. This stands in contrast to the U.S., where unemployment has fallen from 9.1 percent in August to 8.2 percent in March.

Austerity measures, such as spending cuts and higher taxes have been implemented to reduce European budget deficits and slow the growth of their debts. Eight eurozone countries including Greece, Spain and the Netherlands have seen their economies shrink for two straight quarters or more.

Three countries - Greece, Ireland and Portugal - have already required bailouts on account of unsustainable levels of debt.

Bailout fears have intensified in recent months as Spain, Italy and other governments face rising borrowing costs on bond markets, which is a sign that investors are cautious about the size of their debts relative to their economic output.

While austerity is intended to address this concern by reducing a government's borrowing needs, there have been negative side effects, because as economic output shrinks, the debt burden actually looks worse.

Economists are becoming more skeptical of the strict adherence to austerity, saying the region's policymakers need to cut back on short-term budget-cutting and place more emphasis on stimulating long-term growth.

Pro-growth measures include reducing bureaucracy for small businesses, making it easier for workers to find jobs across the eurozone and breaking down barriers that countries have created to protect their own industries. An even more radical proposal by some economists suggest that eurozone governments should not only stop cutting spending, they should actually increase spending while economies are so weak, making reining in deficits a longer-term goal.

"The question is how long EU leaders will continue to pursue a deeply flawed strategy in the face of mounting evidence that this is leading us to social, economic and political disaster," Sony Kapoor, managing director of Re-Define, an economic think-tank and policy advisory company said.

European Central Bank president Mario Draghi has also recently called for a "growth pact" in Europe to work alongside the "fiscal pact" that has placed so much importance on controlling government spending.

Measures aimed at balancing national budgets have led to drastic spending cuts by governments across the continent, including layoffs and pay cuts for government workers, slashing of key services including welfare and development programs, as well as tax hikes to boost government revenues.

As election in Greece and France begin in a few days, there are hopes - certainly among the 17.4 million people unemployed in the eurozone - that Europe may temper, if not reverse, its focus on austerity.

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"With the potential changing of political leaders, coupled with confirmation that nearly half of the eurozone is officially in recession, the strategy of continuing austerity is being widely challenged," Gary Jenkins, managing director of Swordfish Research says.

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