​EU sanctions against Russia impact on reported restructuring job losses in Europe

(Dublin, Ireland): Dramatic recent oil price declines have seen deflation take hold in the EU, and general price levels in December 2014 were 0.2% lower than a year earlier. This is further evidence of a tentative European economic recovery that appears to be running out of steam. Growth forecasts for the EU have been trimmed to 1.1% in 2015 after growth failed to reach even 1% in 2014. The main causes have been a slowdown in the main euro zone economies of Germany and France as well as the third recession in Italy since the global crisis (there was negative growth in the second and third quarters of 2014). External factors – notably events in Ukraine crisis and Russian sanctions, as well as civil war in Syria – may have contributed to the slowdown.

On the labour market side, unemployment rates remained stable (10.0% in the EU28, 11.5% in the 19 countries in the euro zone) in the three months to November 2014 after falling for most of the previous year.

The ERM recorded a total of 318 cases of restructuring between 1 October and 31 December 2014. Of these, 191 were cases of announced restructuring involving job loss and 120 were cases involving announced job creation; seven cases involved both job loss and job creation. These cases comprised a total of 76,495 job losses and 38,744 announced job gains. Internal restructuring accounted for 69% of the announced job losses – somewhat less than the previous quarter. The proportion of job losses attributable to closure (11%) substantially increased compared to the percentage reported in the previous quarter (6%). The opposite trend was noted for bankruptcy, going down from 13% in the previous quarter to 8% at the close of the year.

In terms of geographical distribution, Germany continued to record the greatest number of announced job losses (17,931 jobs), followed by the UK (17,467), France (13,423), Italy (4,549), and Spain (4,107). Meanwhile, the greatest numbers of announced new jobs were in the UK (6,410), followed by Poland (5,670), Romania (5,012), the Czech Republic (4,637) and Ireland (3,095).

The latest ERM Quarterly for quarter 4, January 2015, also includes a focus on restructuring support measures on public employment initiatives, and a case focus on Lloyds Banking Group and branch banking.