|A wave of massive protests were staged in Greece last year against the government's austerity measures [Reuters]
Unemployment in the eurozone has risen to the highest level since June 1998, before the euro was introduced, according to recent data.
Joblessness among the bloc's 17 countries rose to 10.4 per cent in December 2011, the EU's statistics office Eurostat said in a statement.
Economists say they expect the unemployment rate to increase further later in the coming months.
"We're looking at a further increase over the coming months, so that is worrying," said Martin van Vliet, an economist at the financial firm ING.
After two years of debt crisis and budget austerity cuts across in the region, the number of Europeans out of work has risen to 16.5 million people, with another 20,000 people without a job in December.
Unemployment in Spain reached a new high of 22.9 per cent in November and December. In Greece, joblessness was 19.2 per cent for October, according to the latest data available. Unemployment reached 13.6 per cent in Portugal in the final month of 2011.
Youth unemployment has become major problem in countries across the European Union, especially in Spain, where almost half of young people cannot find full-time work.
Van Vliet, a spokeswoman for Jose Manuel Barroso, the European Commission's president, said on Tuesday that the pan-EU youth unemployment was "unacceptable" and "alarming."
Even in non-eurozone Britain, one of the world's top 10 economies, youth unemployment is almost three times that of
Germany, at 22 per cent of under 25-year-olds. That figure reaches 24 per cent in France and 30 per cent in Italy.
"For me this is the most painful aspect of the whole situation we're facing in Europe, this great divergence on the labour market. Because if unemployment in Germany is falling, we may see less preparedness to help out the rest of the eurozone," Vliet said.
After years of falling unemployment, the 2008-2009 global financial crisis destroyed job creation prospects in Europe and
the ensuing sovereign debt crisis has only worsened the outlook.
In the 27-nation European Union, the number of jobless has risen steadily from a recent low of 7.1 per cent of the working
population in 2008 to 9.9 per cent in December - some 23.6 million people.
Economists say it could reach 11 per cent by mid-2012.
Bid to shift debate
At a summit on Monday, Europe's leaders tried to shift the debate from fighting the debt crisis to reviving growth in a
bloc that produces 16 per cent of global economic output.
They are looking to use up to $107bn of unspent funds from the EU's 2007-2013 budget in an attempt to boost
But most economists expect scant progress while the euro zone's high debtors are compelled to persist with harsh austerity programmes under a new "fiscal compact".
Citigroup, the US financial firm, has dubbed the German-inspired pact for stricter budget discipline, agreed by 25 EU leaders on Monday, as a "compact for low growth", while one European diplomat has said that it "essentially makes Keynesianism illegal".
Even with a pro-growth plan, a growing gap between the wealthy nations of northern Europe and those of the poorer, less
productive south overshadows any EU-wide jobs policies implemented from Brussels.
Germany's unemployment rate fell to 6.7 per cent in January, separate figures showed, a new record low since figures for
Germany were first published.
Austria boasted the eurozone's lowest jobless rate at 4.1 per cent in December, followed by the Netherlands at 4.9 per cent.