The European Union’s most impressive — and somewhat surprising — success story is found in its labor market. In the last three months of 2024, the combined rate reached 70.9%. This extraordinary feat demonstrates the positive, consistent trend of increased labor force participation throughout the EU’s member states. Fast-forward to early 2025, and the EU is reeling from a stunning about-face. Today, the unemployment rate has dropped to its lowest point since 2000.
In Italy the employment rate was only 62.2% while it was feverishly high in the Netherlands at 82.3%. Germany, arguably the other anchor of Europe’s economy, came in with an employment rate of 77.6%. In the fourth quarter of 2024, the United Kingdom increased the region’s employment picture significantly. It utilized a highly ambitious employment rate of 75%.
Rising Employment Across Europe
The Organisation for Economic Co-operation and Development (OECD) recently noted these unprecedented increases in employment rates. This rise is largely fueled by increased labor force participation among younger people. The fastest climber in percentage growth among all countries was Iceland, which recorded an increase of 1.6 percentage points year-on-year. Greece was right in the rearview, with a 1.5 pp increase.
Looking at EU member states, the Netherlands is an outlier. Since 2005, it has been the only other country to reach an 80% employment rate. Like Iceland and Switzerland, it has proven very strong economic stability and success at promoting a competitive job-creating economy.
Unemployment Rates at Historic Lows
The EU unemployment rate fell to just 5.7% in February 2025. This 20-year low is a huge drop and the lowest point we’ve reached since January of 2000. The downward trend in unemployment is a hopeful sign of an upturn in the European economy. This decrease hints at stronger labor markets and greater economic security.
At the same time, Spain’s unemployment rate was 7.4%, and Italy’s was 5.9%. These numbers really do highlight an incredible rebound in the state. All of the countries we’ve studied are doing something to improve opportunities for good jobs and increase sustainable, inclusive economic growth.
Disparities in Employment Rates
While these trends are overall promising, disparities still persist among member states. Turkey registered one of the worst rated employment rates in the countries evaluated at 55.2%. This profound divergence serves as a reminder of continued labor market struggles in some parts of the country and the necessity of more targeted interventions.
Europe is not standing still, and we should do a much better job of addressing these disparities. This will energise continued economic expansion and guarantee that the advantages of employment are fairly shared among all MS.
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