Crisis widens Europe's south-north gap

BRUSSELS - Five years of economic crisis and the return of a recession last year has given rise to a record-high unemployment rate and a widening gap between north and south Europe, a European Union (EU) report said Tuesday.

Unemployment reached the highest level in nearly two decades, while the household incomes declined and the risk of poverty or exclusion was on the rise, especially in the southern and eastern Europe, warned the EU's latest annual report on employment and social development, which was released by the European Commission on Tuesday.

"2012 was another very bad year for Europe ... The divergence was striking between the north and the south of the eurozone," Laszlo Andor, the EU's commissioner for employment, social affairs and inclusion, commented at Tuesday's press conference in Brussels.

"A widening gap is emerging between the countries confronted with fast rising unemployment and those that have better-functioning labor markets," the commissioner added.

The average unemployment rate in the EU increased from 7.1 percent in 2008 to 10.6 percent in the third quarter of last year, with the rise mainly coming from countries in southern Europe such as Greece and Spain.

The report also urged member states to invest more efficiently in education and training, spend better on active labor market policies and support the creation of high-skilled jobs in growth sectors such as the green economy, information and communications technologies, etc.

In a bid to address the growing risks of poverty and social exclusion, the Commission also plans on issuing a social investment package later this year to further mobilize Europe's human capital for growth and cohesion especially in southern Europe.

"We need social investment now, otherwise we will see a decline in economic potential and much larger social costs in the future," the commissioner said.