Why label statement causes compile time error?

The following code has compile time error and why?

public class Program {
  public static void main(String[] args) {
    int counter = 0;
    label1:
      for (int i=0; i!=10; i++) {

        label2:
          int j = 0; //compile time error

          while (j++ < 10) {
            if (j > i) break label2; 
            if (j == i) {
              counter++;
              continue label1;
            }
          }
      }
    System.out.println(counter);
  }
}

From JLS:

Unlike C and C++, the Java programming language has no goto statement; identifier statement labels are used with break (?14.15) or continue (?14.16) statements appearing anywhere within the labeled statement.

The use of labels in loops and breaks has the following rules:

• Any statement can have a label.
• If a break statement has a label it must be the label of an enclosing statement.
• If a continue statement has a label it must be the label of an enclosing loop.

In the above example, there are two problems. The first one is that label2 can't be followed immediately by a declaration statement, this is a syntax error. If we add another statement before the int j =0; to fix the syntax error, so that:

public class Program {
  public static void main(String[] args) {
    int counter = 0;
    label1:
      for (int i=0; i!=10; i++) {

        label2:
          System.out.println(i);
          int j = 0; 

          while (j++ < 10) {
            if (j > i) break label2; //compile time error
            if (j == i) {
              counter++;
              continue label1;
            }
          }
      }
    System.out.println(counter);
  }
}

It unveils the second problem, label2 must be on the enclosing statement, otherwise the compiler thinks label2 is missing.

We can fix the compiler error by simple adding parentheses to the above code. A group of statements enclosed in parentheses {}- called a code block - acts as a single statement. This way, label2 is on the whole enclosing statement.

public class Program {
  public static void main(String[] args) {
    int counter = 0;
    label1:
      for (int i=0; i!=10; i++) {

        label2:
        { //
        //the code compiles with or without this line
          System.out.println(i);
          int j = 0;
          while (j++ < 10) {
            if (j > i) break label2;
            if (j == i) {
              counter++;
              continue label1;
            }
          }
        } //
      }
    System.out.println(counter);
  }
}