Eurogroup chief warns of social crisis over unemployment

Special
Report: Global Financial Crisis

BRUSSELS, May 4 (Xinhua) -- European countries are
heading into a "social crisis" as unemployment is set to jump amid the financial
and economic crisis, the chairman of the Eurogroup of finance ministers warned
on Monday.

"We are in the heart of an economic and financial
crisis and we are heading towards a social crisis," Jean-Claude Juncker, who is
also the Luxembourg Prime Minister, told reporters after chairing a regular
monthly meeting with Eurozone finance ministers.

Juncker said he was very concerned about the sharp
rise of unemployment in Europe as forecast by the European Commission.

The commission said in its latest estimate earlier on
Monday that European labor markets have been cooling as a result of the deepest
and most widespread recession since the Second World War.

Employment is expected to contract by about 2.5
percent in both the European Union (EU) and the Eurozone this year and by a
further 1.5 percent in 2010, resulting in about 8.5 million job losses for the
two years, in contrast to the net job creation of 9.5 million from 2006 to 2008.

Unemployment is forecast to reach 10.9 percent in the
EU in 2010 and 11.5 percent in the Eurozone.

Juncker urged European employers not to lay off
workers prematurely and turn to alternative choices such as part-time employment
and shorter working time as buffer measures.

"I urge employers not to lay off people prematurely.
I urge them to show social responsibility," he said.

Juncker's warning came days before a planned EU
summit in Prague, the Czech Republic, which is dedicated to employment.

The Czech EU presidency had originally hoped to
invite all the heads of state and government of 27 member states to the
employment summit, but it was later downgraded to a mini one.

"My feeling is that many politicians underestimate
the extent of this phenomenon," Juncker said.