Hardly a day goes by without another chapter opening in Europe’s Eurozone debt crisis.

However, while all appears doom and gloom, recruiters in Spain, Italy and even Greece, the three countries in Southern Europe most affected by the debt crisis, appear far from deflated.

They paint a more nuanced picture, which suggests that despite being in the midst what Angela Merkel, the German Chancellor, described as Europe’s “toughest hour since World War II”, not quite everything is quite as bad as it appears.

Greece was the first country to be hit by the Eurozone crisis. The European Commission recently predicted that the Greek economy would contract by 5.5% in 2011, with unemployment rising to 16.6%.

“I would say hiring would definitely be half of normal,” says Iraklis Papadopolous, principal and country manager, Greece, for executive search firm Pedersen & Partners.

This means that some hiring is still going on. “I would say that the large companies at least are hiring selectively rather than imposing a recruitment freeze,” he adds. The other bright spot is demand for executives from Greek companies that have diversified internationally because of the poor performance of the domestic Greek economy.

Spain has suffered from persistently high unemployment of more than 20% for several years. Christopher Dottie, managing director of Hays, Spain says because there has been no growth in employment since 2007, the number of jobs registered with Hays has remained stable.

That said, the mixture of general economic uncertainty and the government’s austerity measures aimed at reducing Spain’s debt is biting. “Construction, property and life sciences have been quite badly affected,” says Dottie.

Dottie explains there is a basic disconnect between what jobseekers want - retraining and work experience and what employers want -“people who will bring added value from day one”.

Another issue is that the labour market is gummed up because with few jobs around, workers in jobs are reluctant to move in the current climate. “Everyone is looking for security,” says Dottie. The cost of laying staff off - 45 days pay per year worked - also works against a flexible labour market.

However, one sector doing relatively well is IT, where strategic investment by regional authorities in Malaga and Valencia have proved a magnet for investment and for talent.

Federico Vione, chief executive of Adecco Italy, says there has been a slowdown in the Italian market in the last nine months. However, he adds: “The situation is patchy, varying between territories.” Areas of continuing strength are manufacturing, particularly textiles and footwear, as well as niche engineering sectors such as aerospace.

The so-called ’Made in Italy’ sectors of the economy that includes fashion and design, furniture as well as food produce are still performing relatively well. Vione adds that there are talent shortages in the green energy sector and for engineers.

While recruiters across Italy, Greece and Spain are making the most of the economic realities of the continuing debt crisis, economists paint a bleak picture.

Even in a best-case scenario, in which the politicians agree a package of measures that settles the financial markets, Luis Carlos Nino, an economist at Oxford Economics, sees unemployment remaining at 21-22% in Spain and around 20% in Greece.

For unemployment to come down, he says, Eurozone countries need to grow by 3-4% a year, with countries such as Greece needing to grow much faster. However, with austerity measures already in place, and likely to be a feature for many years, such growth rates look highly unlikely.

According to Carlos Nino, part of the solution to revitalise the Southern European economies and boost hiring are reforms to employment legislation.

As he explains, a company may decide that hiring additional staff is too risky if, for example, the cost of getting rid of people if and when the work comes to an end is too high.

In the worst-case scenario in which the euro implodes, Ben May, European economist at Capital Economics, sees the region falling into “a much deeper recession”.

If that is the case, even the most positive-thinking recruiters in Greece, Spain and Italy may find it hard to find grounds for optimism.