- Eric Heyer, economist at think tank OFCE
This week's highlight will be Friday's report from the Eurostat that is likely to show no change in the unemployment rate in December, staying around a record high at 12.1%. While any improvement will be highly welcomed by markets and the single currency will receive a strong bullish impetus, while Tuesday's data raises concerns the report will surprise markets to the downside.
France, Europe's second largest economy, registered 10,200 more jobless people in December, with more than 3.3 million people being unemployed. The overall jobless rate now stands at 11.1%. The indicator soared by 5.7% during the last year, and picked up 0.3% in December. While French Labour Ministry pointed out that the rate of unemployment appeared to be slowing, with 177,800 people losing their jobs in 2013, economists believe the improvement was led only by the state-sponsored jobs rather than a real economic recovery.
Moreover, Tuesday's data breaks Francois Hollande's pledge to push unemployment lower by the year end. The President, whose approval rating is languishing at record lows, made preventing the deterioration in the labour market one of his top priorities for 2013. Hollande promised not to make any tax break plans until at least 2016 in order to rule out any quick turnaround in the key labour market.
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