EU employment rises for first time since financial crisis

The employment rate has risen in the EU for the first time since the financial crisis in a sign of the region's tentative economic recovery.

The proportion of 20 to 64-year-olds in work crept up from 68.4 to 69.2 per cent between 2013 and 2014, although it remained below its pre-crisis peak of just over 70 per cent.

Employment rates increased in almost every EU state, including those with the most damaged labour markets such as Greece, Italy and Spain, although rates in all three countries remained below 60 per cent.

There were also improvements in Europe's stronger economies: employment rates in the UK, Germany and Sweden rose to 76.2 per cent, 77.7 per cent and 80 per cent respectively.

The figures add to evidence of a nascent economic revival in the eurozone, although unemployment remains uncomfortably high at 11.3 per cent and is only forecast to decline slowly. The European Commission forecasts the jobless rate will remain in double digits next year.

"The employment rate is recovering because unemployed people are moving back into employment, which is very encouraging," said Bert Colijn, senior economist at the Conference Board, a research organisation.

"But obviously ... there are still very large gaps between where we were in 2008 and where we are right now, and especially in countries like Greece and Spain it will be a very long time before we come back to the numbers we saw [before the crisis]."

The EU's target to reach an employment rate of 75 per cent by 2020 also seems "a bit out of the question ... any time soon," he added.

Still, the improvement in employment rates will boost hopes the eurozone will recover some of the output lost during the years of economic stagnation that followed the crash.

The legacy of the crisis, coupled with an ageing population and governments' unwillingness to introduce politically unpopular structural reforms, have fuelled fears that growth in the region will suffer for years to come. Higher rates of employment and higher participation in labour markets by women would help reverse those fears by boosting economies' ability to grow in the longer-term.

The female employment rate in the EU has grown steadily since 2010 and is now 63.5 per cent - higher than the pre-crisis peak.

Similarly, there has been a strong rise in the proportion of older Europeans who are still working: employment rates for 55 to 64-year-olds have risen from 38.4 per cent in 2002 to 51.8 per cent in 2014 as a result of governments' efforts to disincentivise early retirement.

Germany has seen a particularly swift increase in older worker participation and now has the EU's second-highest employment rate for 55 to 64-year-olds, beaten only by Sweden.

On top of these long-term trends, some countries such as Spain have begun to reform their labour markets to make them more flexible.

Despite signs of stronger employment growth this year, underemployment remains a concern. More than a fifth of part-time workers in the EU said last year they worked fewer hours than they would have liked.

Europe's young people remain the hardest hit. Unemployment among 15 to 24-year-olds in the EU surged from 15 per cent to almost 24 per cent between 2008 and 2013. While it has started to decline, it remains above 20 per cent in the EU and above 50 per cent in Spain and Greece.

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