Recession-Wracked France, Europe's Second-Largest Economy, Has More Unemployed Now Than It Has Had Since 1998

French unemployment increased in the first three months of this year to 10.8 percent, up from 10.5 percent in the first quarter of last year and the highest rate since the late 90s.

The jobless rate hasn’t been this high since the 1998 economic contraction caused by the Asian economic meltdown that began in Thailand a year earlier. (For more on that crisis, enjoy this flashback by New York Times columnist Paul Krugman writing in Foreign Affairs magazine.)

On Tuesday, the International Monetary Fund cut France’s GDP forecast for the year and called on the administration of President François Hollande to speed up efforts to lower labor costs and put a stop to tax increases it says are causing the country to fall competitively behind its European neighbors. The IMF expects the country’s economy, which is already teasing with recession, to contract by 0.2 percent this year and to grow by a lackluster 0.8 percent in 2014.

Last week, Eurostat’s official EU and euro zone unemployment figures show France’s jobless number stood at 11 percent in April, based on a different methodology than the one used by Paris. France’s alarming jobless number comes as the European Central Bank is meeting in Frankfurt and is expected to hold the benchmark interest rate at 0.5 percent.

The BBC reported the ECB might announce a plan to spur lending to small- and medium-sized businesses, which provides three-fourths of the jobs in the euro zone.