Scary Prediction That Greek Unemployment Could Hit 30%
By Andy Dabilis on July 13, 2012 in Economy, News, Politics
Lines at the unemployment office in Greece are getting longer
ATHENS Greeces jobless lines, now with more than 1.1 million people in them as unemployment has hit 22.5 percent, could be a lot longer by the end of the year and be the worlds highest, one of the countrys leading labor analysts has projected, unless the new government does something fast. Greece has the worlds third-highest unemployment rate, behind only Spain, which is set to endure austerity measures, and South Africa, which stands at 24.7 percent. If Greece hits the 30 percent rate, it will be the highest in the world.
Savas Robolis, an economics professor and Director of the Labor Institute of the General Confederation of Greek Workers (GSEE-ADEDY,) told SKAI TV that the harsh austerity measures supported by new Prime Minister Antonis Samaras and his coalition partners, the PASOK Socialists and Democratic Left, had worsened the countrys recession and would put hundreds of thousands more people out of work.
The policies that are being followed in Greece and Europe mean it is inevitable that the macroeconomic figures will worsen, he said. In Greece, one employed person covers the costs of caring for an unemployed person or pensioner. This cannot continue. He estimated that Greeces social security funds are losing 9 billion euros ($11 billion) a year due to high unemployment, with fewer workers paying taxes to support the retired.
He also said more of Greeces most talented and young will flee the country because pay cuts, tax hikes, slashed pensions, the coming reduction of the public workforce by 150,000, a reduction in the minimum wage and slashed unemployment benefits had made Greece unlivable for many. We will remain a country of middle and unspecialized labor and limited growth, said the economist, whose union has a stake in preserving jobs and has opposed the austerity measures.
Greece is suffering a fifth year of recession and depends on financial aid from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which ordered the austerity measures. Ahead of the June 17 elections, Samaras said he would try to renegotiate some changes, but changed his mind after being elected, but now has changed his mind again after being pressured by PASOK leader Evangelos Venizelos and Democratic Left leader Fotis Kouvelis, whose parties are now tied to the unpopular measures.
There are now 1.109 million people out of work, ELSTAT, Greeces statistics service said. It was a sharp rise from 16.2 percent in April last year. Some temporary support may be provided over the summer months, especially from the tourism sector, said Platon Monokroussos, an economist at EFG Eurobank. However, given the fact that the jobless rate is a lagging indicator of broader economic activity, unemployment may not have reached its peak yet.
Tourism, a key sector which accounts for about one in five jobs, is expected to turn out weak this year and revenues fell by 15.1 percent in the first quarter. Unemployment in Greece is twice the average for the 17 countries sharing the euro, which stood at 11.1 percent in May, and is fast approaching that of Spain, which hit 24.4 percent in the first quarter. More than half of Greeks aged 15-24 are without work.
Samaras so far has offered no prescription for putting more people back to work other than vague goals of trying to make Greece more competitive, although his administration has said it would seek not to fire any workers despite Troikas admonitions that the workforce has to be reduced. Samaras said his government would seek to do that through attrition, but is trying to find ways to make another $15 billion in cuts without imposing more austerity.
The dogs bark, the convoy marches on
The dogs bark, the convoy marches on