Job losses jumped in the third quarter of 2012 as the painful debt restructuring saga dragged on, and as the EU economy moved closer to recession.

Dismal economic growth figures show that the likelihood of a return to recession seems almost inevitable, with modest economic recovery not likely until at least mid-2013. Notwithstanding some positive measures to allay the immediate debt and banking crisis afflicting the EU, there remains tremendous uncertainty over the capacity to absorb the deep structural remedies necessary to restore long-term fiscal balance.

The depth and duration of the required economic adjustment, not to mention the social consequences, is only beginning to be fully realized, in terms of longer term European unity and global growth.

Official OECD estimates have downgraded both EU economic activity and growth among the developed economies, largely as a consequence of the EU stagnation. GDP growth in the third quarter in the EU was a meagre 0.1% and year- over-year recorded a fall of 0.4%. Over the year, the UK declined -0.1%, France edged 0.1% higher and Germany grew by 0.9%.

While more positive signs emerge from the US, and with China’s own mini-slump looking to have bottomed, the EU’s problems remain a serious threat to the world economy.

Within the EU, the number of job losses as a result of business restructuring activity jumped in the third quarter to more than 100,000, while the number of job creations fell to a just 30,000.

Equally worrying is that the economic weakness that was once confined to peripheral economies is beginning to impact the core economies.

Across the EU, the impact of austerity measures is producing stark differences in economic performance and employment. Rising unemployment rates and, in particular, youth unemployment rates in Greece and Spain of above 50% are calling into question the merit of spending cutbacks and the capacity to sustain austerity over the long haul.

On a positive note, employment gains were recorded in the manufacturing sector (8,350 positions) as well as transport & storage (7,240), retail (3,554), and information/ communication (2,380).

To find out about the hiring trends in individual companies, as well as more detail on the general labor conditions across the EU, download the Q4 Employment Restructuring Report now here.