LONDON (MarketWatch) — Unemployment is running at more than 24% unemployment in Greece. It is above 20% in Spain, and in France and Italy it is well above 10%, and has been stuck at those levels for many years. Given those terrible numbers, you might think that the eurozone’s jobless crisis couldn’t be any more crushing.

But unfortunately you’d be wrong. In fact it is even worse than most people realize.

Why? Because the official statistics only capture people who are actively looking for work. There are millions more who would be working — if the economy were capable of generating jobs. Eurostat has just revealed statistics that show a hidden army of underemployed and discouraged workers, who would be putting in more hours if it were possible.

That matters. Official unemployment data is just one measure of the slack in an economy. What the figures reveal is how dramatically most of the eurozone is failing to create enough work for its people, and how futile even the herculean efforts of European Central Bank President Mario Draghi to stimulate demand are likely to prove — since even if demand does pick up slightly, more people will simply emerge to take whatever jobs are created.

More Young Adults Living With Parents

We have known for years that Europe has a serious unemployment problem. A mixture of weak demand, punishingly high payroll taxes, and restrictions on hiring and firing that favor insiders over outsiders have combined to create one of the most dysfunctional labor markets in the world.

In most countries the rate goes up and down, but in much of Europe it ratchets ups and then stays there. In France, for example, the jobless total went above 9% all the way back in the mid-1980s and it has bounced around that level ever since. In Spain it went from under 9% at the height of the last boom to above 25% after the crash, and, although it has come down a bit since then, it shows no sign of getting back to a level most advanced economies would regard as acceptable.

Initiatives come and go, but the army of the jobless remains in place.

What is also starting to emerge, however, is that Europe has a serious underemployment problem as well

Eurostat, the statistical arm of the EU, has published official data this month on the numbers of people who would like to be working more. It reports that 44 million people in the EU are working part time, 20% of the total, and, more important, many of them would rather be working more hours. In Greece, for example, 72% of part-time workers would like more hours. In Spain it was 54% (which knocks on the head the myth — popular in Germany — of the lay-about Greeks and siesta-loving Spaniards).

Even worse, it found a huge army of people who could work, but are not seeking employment. In the dry language of the economics textbooks, they are known as “discouraged workers.” In Italy, that comes to 14% of the labor force. Across the continent as a whole, that came to 9.3 million people. Another 2.2 million people were classified as having the potential to join the labor market at any time — students close to graduation, for example.

In fact, the real figures are probably even worse than that. The numbers of people who might look for work can be fairly flexible. Only 47% of Italian women work, for example. In Spain it is only 51%. That compares with 65% in the U.K.

While some of those societies may be more socially conservative, the impact of that is often exaggerated. In fact, the main reason Italian and Spanish women don’t work as much as their British sisters is because they can’t find jobs, and certainly not at generous enough rates of pay to cover the additional costs of child care they would incur.

If those economies were capable of sustained growth, or could create jobs in the way the British economy has done over the last few years, a lot of those women might decide they were keen to work after all — and that could add another 10 percent to the pool of labor.

Europe is still in denial about the extent of the crisis in its jobs market. It not only has a huge army of officially jobless, and an even worse one of youth unemployment – let us not forget that in Greece, the jobless rate for the under-25s is above 50%, in Spain is it more than 45% and in Italy and France it is above 24%.

It also has an even bigger reserve army of people who would like to work more but who have effectively been shut out of the jobs market.

That has important consequences for the economy that are too often overlooked. Such as? First, it means that the ECB has virtually no hope of ever getting the continent out of deflation and depression. Even if it does stimulate demand a little — and despite printing a ton of money and taking interest rates negative, there is little sign of it — a fresh supply of labor will simply emerge to take all the jobs that are created.

Sure, the printed money will be spent, but wages are not going to rise because there is too much slack in the labor market, so a recovery will never be self-sustaining.

Next, it means that skills are going to rot away.

Across a whole generation, the habit of working is being lost, and the skills that would be learned if people had jobs will never be acquired. Little by little, countries with those levels of unemployment and underemployment lose competitive advantage to nations where work is more plentiful.

That means the continent is going to massively underperform for the foreseeable future. The eurozone economy will grow in fits and starts. But until it can create jobs for all the people who would like to work, and keep them in full-time employment, is cannot be judged a success, or anything close to it.