Unemployment Reaches Record High in Euro Zone FRANKFURT - Unemployment in the euro zone rose to a new high in March, according to figures released on Wednesday, which came a few days before crucial elections in France and Greece, and which are likely to intensify calls for an easing of the region's austerity drive. Unemployment in the 17 countries that belong to the euro zone rose to 10.9 percent in March from 10.8 percent in February, according to Eurostat, the European Union's statistics agency. In March 2011, the rate was 9.9 percent, a number that illustrates the deterioration of the area's economy during the past year. The monthly increase, the 11th in a row, translates into more than 17 million jobless people, and is in line with other recent indicators showing that the euro zone economy remains distressed. Manufacturing in the zone hit a 34-month low in April, according to a survey of purchasing managers released Wednesday by the research firm Markit. Greece and France will hold national elections on Sunday, when citizens are expected to register their discontent at the decline in living standards and public services that has been a consequence of government budget cutting. Leaders could come to power who appear unwilling to continue the austerity programs pushed by North European countries, especially Germany. The figures also came a day before the European Central Bank is scheduled to hold its monthly monetary policy meeting. While the E.C.B. governing council, meeting in Barcelona, is not expected to lower its benchmark interest rate from 1 percent, recent economic data may have increased the chances for a surprise cut. The data on manufacturing "raise the likelihood of a rate cut tomorrow," Stella Wang, an analyst at Nomura, wrote in a note to clients. "But," she added, "we stick with our main call of no rate cut assuming that the E.C.B. prefers to wait for more data before fundamentally changing its view of the economic outlook." As growth has faltered around the euro zone, some policy makers have begun to talk more about the need to balance government budget cutting with measures to promote growth. But it is not yet clear how they would do so when investors are reluctant to lend governments any more money, and citizens in wealthier countries like Germany are not willing to subsidize their neighbors. Mario Draghi, the president of the E.C.B., last week called for a growth compact and a re-examination of where the euro was headed. Martin van Vliet, an economist at the Dutch bank ING, wrote in a note to clients, "The grim unemployment figures for March will likely encourage talk about a long-overdue "growth pact" for the euro zone." Mr. Draghi appeared to mean that countries like Greece and Spain should redouble their efforts to make their economies function better, for example by making it easier to start a business or for employers to dismiss workers. But such changes may encounter political resistance, and during election campaigns in Greece and France the talk has been more of reducing the pressure on governments to cut spending. François Hollande, the Socialist who is leading in the polls ahead of a runoff election on Sunday against the French president, Nicolas Sarkozy, has promised to increase subsidies to industry. In Greece, the main political parties have campaigned on a promise to renegotiate terms of international aid. The euro zone unemployment figures also illustrated the growing gap between Northern Europe and countries in the south. The jobless rate in Germany was 5.6 percent as calculated by Eurostat, compared with 24.1 percent in Spain and 21.7 percent in Greece. But some economists said there were signs of weakness even in Germany, which has the largest economy in Europe. The Federal Employment Agency, which counts some people as unemployed who are excluded by Eurostat's methodology, said Wednesday that the number of jobless people in Germany fell by 65,000 in April to below 3 million, an unemployment rate of 7 percent. "Compared with most other European countries, the German labor market is still a bright spot," Thomas Harjes, an analyst at Barclays Capital, wrote in a note. Greece received an upgrade from Standard & Poor's on Wednesday, reflecting completion of a debt-reduction deal with creditors. S.&P. raised Greek debt from selective default to CCC, still deep in junk bond territory. The agreement with bondholders cut Greece's debt by €100 billion, or $131 billion, but with economic output plunging and joblessness rising, the country remains a flash point for the euro zone and the global economy. The elections could set up a confrontation with the International Monetary Fund, which along with the European Union is providing financial support to Greece in exchange for big budget cuts. The main political parties will not be able to deliver on promises to negotiate easier terms, economists at UBS wrote in a note Wednesday. While voters are fed up with austerity, Greece's benefactors are frustrated by what they see as a government failure to remove barriers to entrepreneurship and take other steps to create a more competitive economy. As result, the I.M.F. could postpone aid until Greece fulfilled its obligations, the UBS economists said. "This could generate considerable tension, with the Greek government quickly running out of cash and being forced to stop paying salaries and pensions," they added. Social turmoil would almost certainly follow.