Euro zone confidence climbs, unemployment problems remain

The confidence of business managers polled by the European Commission rose for its fourth successive month in the euro zone, the EU executive said on Friday. The positive trend was particularly strong in Germany and the Netherlands but was also seen in Italy, France and Spain.

The measure of sentiment across the bloc in August, based on business orders, industrial confidence and other factors such as companies' hiring plans, increased by 2.7 points to 95.2.

Such rising confidence has inspired some to predict that the 17 countries using the euro have overcome a crisis that was triggered by banks' investment in risky mortgage debt and later drove some states to the brink of bankruptcy.

In a separate release, Eurostat, the European Union's statistics agency, said annual consumer price inflation in August would be 1.3%, down from 1.6% in the previous month due mainly to a drop in energy prices.

A lack of price pressures is a further potential boon to the economy, as households have a little more spending power, and allow the European Central Bank to stick to its record lower interest rate policy to try to help the economy.

But while morale improved, unemployment in the euro zone in July remained at a record high of 12.1%, with the sharp contrast between countries such as Germany and Spain, showing that the upswing is not being felt everywhere.

While just over 5% of workers in Germany were unemployed, according to Eurostat, that figure reached almost 28% in Greece and was over 26% in Spain.