In this article, we will look at the 5 European countries with the highest unemployment rates. We have also discussed the fluctuating unemployment rates in the EU zone in 2023 in another article. If you are interested in reading about that along with a more extensive list, head straight to the 17 European Countries with the Highest Unemployment Rates.
5. Greece
Unemployment Rate: 12.4%
Greece’s economy faced a tumultuous journey, accentuated by a sequence of crises and economic downfall. Joining the Eurozone in 2001, Greece initially enjoyed lower interest rates and increased investment. However, the structural flaws within its economy, including tax evasion and low productivity, remained unaddressed. The global financial crisis of 2007 further unveiled Greece’s fragile economic foundation, leading to a default on its debt in 2015, amounting to €1.6 billion ($1.7 billion) to the IMF. The subsequent bailout packages totalling €289 billion ($316.27 billion) from international creditors imposed stringent austerity measures, exacerbating unemployment rates, which peaked at 25.7% in August 2012.
Greece’s economic woes were deeply rooted in its pre-Eurozone era, marked by high inflation, fiscal deficits, and low growth. While Eurozone membership initially masked these issues, it eventually exacerbated them by highlighting Greece’s competitiveness gap with other member states, notably Germany. Despite efforts to rebound, Greece’s GDP growth remained volatile, swinging from negative to positive.
4. Bosnia and Herzegovina
Unemployment Rate: 12.7%
Apart from a high unemployment rate in the country, there is also a growing concern about income inequalities in Bosnia and Herzegovina.
In Bosnia and Herzegovina, women devote over six hours daily to unpaid care work, while men contribute just over three hours, as revealed by a recent study. 85% of women cook daily, compared to only 27% of men. The report, “Baseline Study on Care Economy in Bosnia and Herzegovina,” conducted in 2022 by the Economic Institute Sarajevo and UN Women BiH with support from Sweden, highlights the unequal burden of care responsibilities. This disparity perpetuates gender inequality and limits women’s access to the labor market.
3. Spain
Unemployment Rate: 12.9%
Spain struggles with rising unemployment, reaching 2.77 million in January, attributed to lower productivity. The services sector saw an increase of 58,721 jobless individuals, while agriculture and industry also faced increases. Despite a reduction in the construction sector, Spain’s dual labor market, tight regulations, and reliance on temporary contracts exacerbate unemployment, disproportionately affecting young, unskilled, and immigrant workers. Moreover, Spain contends with persistently low productivity, particularly in smaller firms, hindering job creation. In response, Spain extends cost-of-living support amidst soaring inflation, offering subsidies and VAT reductions. These challenges persist amid global uncertainties like the Russia-Ukraine conflict and the COVID-19 pandemic.
2. North Macedonia
Unemployment Rate: 14.4%
North Macedonia faces financial struggles, with 72% of citizens finding it difficult to manage household income. Unlike its neighbors, it didn’t see a rise in this trend. Corruption and legal inefficiency hinder economic progress, resulting in one of Europe’s lowest per capita GDPs. The grey market comprises nearly 20% of GDP. In 2017, its GDP per capita was 36% of the EU average. With a GDP per capita of US$9,157 and a Human Development Index of 0.701, North Macedonia lags behind former Yugoslav states in development and economic size.
1. Montenegro
Unemployment Rate: 15.3%
In January 2024, Montenegro’s unemployment rate dropped to 13.38%, down from 13.95% the previous month and significantly lower than the 16.30% recorded in January 2023. The number of unemployed decreased by 14% year-on-year to 38,014 by February’s end. In December, Montenegro had 39,942 unemployed, with the largest workforce in wholesale/retail trade (19.57%), state administration (9.34%), and construction (7.44%). Despite a monthly decline of 0.22%, the country saw an 8.5% annual increase in employment, totalling 246,449 by December. Montenegro’s budget surplus shrank 69% year-on-year in January, while its net FDI decreased by 45% in 2023. It is the European country with the highest unemployment rate.
Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also take a peek at 25 Countries With The Lowest Female Employment and 25 Countries with the Highest Employment Rates in the World.
