Study: Europe To Lose 3.5 Million Jobs This Year

February 18, 2009 3:22 p.m. EST

Brussels, Belgium (AHN) - A new study by the European Union Commission released Tuesday said 3.5 million EU workers will lose their jobs in 2009. As more workers are laid off, average unemployment rate in the 27-nation regional bloc will go up to 10 percent from 7 percent in 2008.

Expected to be the worst-hit sectors are metalworking, automotive, finance and logistics. The report foresees a bright spot for the retail industry.

It was for the first time that the report predicts continued increase in unemployment rate beyond 2010. Previous studies foresaw the start of a slight recovery this year.

As the global financial crisis grips the region, reeling from weaker currency are nations that do not belong to the euro zone. Poland's currency, the zloty, continues to dip against the euro leading to the country's industrial output plummeting at a yearly rate of 9 percent for the last quarter of 2008.

Other non-eurozone countries that become vulnerable to the global crisis were Hungary and Latvia. Hungary stood on shaky ground because of the country's large exposure to foreign lending, and Latvia, like Hungary, had to be rescued by the International Monetary Fund, because of its weak banking system and overdraft consumers.