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Thursday, 21 February, 2002, 17:44 GMT
Polish unemployment hits record high
Elderly Poles
Work is becoming scarcer in Poland
Poland's unemployment rate jumped to a new post-communist high of 18% in January, exacerbating the economic difficulties facing the new government.

The government has admitted the situation is unlikely to improve soon, amid speculation the figure could hit 20% this year.

I think within two years you'll see an unemployment rate of 22%

Robert Beenj
Lehman Brothers
"I do not expect a clear improvement in the situation in the labour market this year," said Janusz Witkowski, deputy head of the Central Statistical Office.

The acceptance of the worsening situation is bad news for Prime Minister Leszek Miller, an ex-communist whose Democratic Left Alliance ousted the Solidarity government in September elections with pledges to improve life for average Poles.

The rising jobless rate could make Poland's accession to European Union more difficult, with some countries expressing fears that Polish workers could flood their own troubled job markets.

Outlook poor

Unemployment has been climbing steadily higher since it hit 16.8% in November, the highest level since the end of communist rule in 1989.

The number of jobless is now 3.3 million in a country of 39 million.

About 1 million new school and university graduates are expected to hit the job market this year and push the rate higher.

"Within 2 years you'll see an unemployment rate of 22%," Robert Beenj of the investment bank Lehman Brothers told the BBC's World Business Report.

The sell-off and streamlining of state-owned industries put many Poles out of work and has eroded support for further free-market restructuring to qualify for EU membership.

Germany and Austria have demanded a seven-year transition before workers from new members in Eastern Europe can roam the EU in search of jobs.

"In seven years time the unemployment rate will still be very high, and may well be around 20%, so in the short term the problem will be avoided but it won't go away," said Mr Beenj of the transition period.

Poland hopes to join the EU in 2004.

Robert Beenj, Lehman Brothers
"I think within 2 years you'll see an unemployment rate of 22%."
See also:

30 Jan 02 | Business
East Europe rate cuts promise boost
19 Oct 01 | Business
Economic tests for new Polish regime
24 Sep 01 | Business
Poland's economic challenge
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