The European Commission's latest Employment and Social Situation Quarterly Review published by the European Commission shows that the employment and social situation in the EU remained critical in the fourth quarter of 2012 with employment receding overall and unemployment rising further. Among other things, the report highlights that the tightening of public budgets has adversely affected employment both directly through reduced public sector employment and indirectly through lower aggregate macroeconomic demand.

The European Commission published the latest Employment and Social Situation Quarterly Review which notes that net immigration from outside the EU has slowed down and that the crisis has adversely affected fertility. Overall, according to the report, the employment and social situation in the EU remained critical in the fourth quarter of 2012 with employment receding overall and unemployment rising further, while households' financial situation remained serious. In the second quarter of 2012, according to the Quarterly Review published in October 2012, labour market and social divergence persist between Member States.

The report also underlines that the unemployment rate gap between the south/periphery and the north of the euro area reached an unprecedented 10 percentage points in 2012. Overall employment in the EU fell by 0.4% in 2012, with positive developments only noticeable in part-time work. In the fourth quarter of 2012 alone, it fell by 0.2% compared to the previous quarter.

Furthermore, according to the Commission, the share of the EU population reporting financial distress remains well above levels observed at any time in the previous decade, affecting almost one-in-four low income households. The rising number of young people under the age of 25 who are neither in employment nor in education and training (NEET), now accounting for roughly 8 million young people, is also a major cause for concern.