European unemployment has hit a new record and Moody's cut Slovenia's debt rating to junk status as German Chancellor Angela Merkel defended her crisis strategy, pushing for twin goals of fiscal rigour and growth.

Grim new data showed on Tuesday that European unemployment set a fresh record in March with more than 19 million jobless people -- including one out of four under-25-year-olds.

The Eurostat data agency reported an extra 62,000 people joining unemployment queues in just four weeks in the eurozone as the jobless rate climbed for the 23rd consecutive month -- hitting 12.1 percent in March.

The frightening new figures -- which showed almost two in three under-25s in Greece and Spain unemployed -- come amid vocal criticism over the effects on jobs of the cost-cutting measures pushed by austerity advocates.

Anger against austerity is rising across Europe as hard economic data fails to show a turn-around.

Greece saw joblessness climb relentlessly to 27.2 percent in January, the latest available figures, from 26.3 percent in December.

Meanwhile Portugal, with unemployment at 17.5 percent in March, was seeking to agree new austerity measures after its Constitutional Court rejected as discriminatory cuts to civil servant salaries and pensions decided in response to demands by EU-IMF lenders.

In Cyprus, which saw a huge month-to-month rise in unemployment to 14.2 percent against 10.7 percent the previous month, the parliament was to debate the terms of a tough 10-billion-euro EU-IMF bailout.

The EU's employment and social affairs commissioner Laszlo Andor warned that "EU institutions and governments, business and social partners at all levels need to do all they can to avoid a 'lost generation'".

Source: Agencies