Greek unemployment rate hits 25.1 per cent in July
Riot police stand by as a man ducks under lowered shutters at the entrance of the finance ministry, in Athens on Thursday, Oct. 11, 2012. (AP / Dimitri Messinis)
Published Thursday, October 11, 2012 3:00PM EDT
ATHENS -- Unemployment in Greece hit a record high of 25.1 per cent in July as the country's financial crisis continues to exact its heavy toll, official figures showed Thursday.
All indications are that unemployment in Greece will continue to rise. The economy has shrunk by around a fifth since the recession started in 2008 and youth unemployment has pushed way above 50 per cent. The economy is expected to enter a sixth year of recession next year.
"This is a very dramatic result of the recession," said Angelos Tsakanikas, head of research at Greece's IOBE economic research foundation.
The state statistics agency said Greece's unemployment rate rose from 24.8 per cent in June. According to European statisticians, that would be the same rate as Spain's in August.
The two countries have the highest unemployment rates among the 17 that use the euro. In August, eurozone unemployment stood at an average 11.4 per cent, itself the highest level since the single currency was launched in 1999.
Greece's statistical authority said 1.26 million Greeks were out of work in July, with more than 1,000 jobs lost every day over the past year. In the worst-affected 15-24 age group, unemployment was 54.2 per cent. In July 2008, a year before Greece's acute financial crisis broke, there were only about 364,000 registered unemployed.
The country's main GSEE labour union said real unemployment is above 30 per cent and growing, which it blamed on "violent" government cutbacks.
After losing access to international money markets and nearly defaulting on its mountain of debt, Greece has survived on international bailouts since May 2010.
However, solvency comes at a harsh price: To secure and continue receiving the loans, Athens imposed tough austerity measures, slashing incomes and repeatedly increasing taxes, in an attempt to get its public finances in order.
The conservative-led government is currently in negotiations with the country's creditors over another raft of austerity measures, worth C13.5 billion ($17.4 billion) over the next two years, so it can get the next batch of bailout funds. Greece has to satisfy certain periodic conditions in order to qualify for the handouts.
Without the money, Greece won't be able to pay all its financial obligations and may end up defaulting on its debts and leaving the euro.
The cutbacks have triggered deep resentment among a population reeling under nearly three years of austerity. GSEE and other main unions have called a new general strike and demonstration next week.
"During a time when unemployment is strangling Greek society and the recession is at 7 per cent, it is at least provocative that (bailout creditors are) focusing on further bleeding workers and pensioners," GSEE said in a statement.
Finance Minister Yiannis Stournaras was holding talks Thursday evening with representatives of the European Union, International Monetary Fund and European Central Bank -- the so-called troika. The government still hopes to have struck a deal before next week's EU summit in Brussels, officials say.
The troika has to sign off the package for the release of the funds.
Some evidence emerged Thursday that the government's strategy is working on one front, at least. Finance Ministry figures showed that the deficit-busting effort is on track despite lower-than-anticipated revenues.
The ministry said the January-September deficit was C12.64 billion, lower than the C13.5 billion target. Although revenues were C1.3 billion off target, spending was C2.2 billion less than budgeted.
All three parties in Greece's governing coalition say they want a two-year extension, to 2016, in the new austerity deadline, and IMF chief Christine Lagarde on Thursday said she backs the notion.
"I said repeatedly that an additional two years was necessary for the country to actually face the Fiscal Consolidation Program that is considered," Lagarde told reporters as the IMF and World Bank held annual meetings in Tokyo.
But German Chancellor Angela Merkel, who in a visit to Athens on Tuesday praised Greek progress with reforms but stressed that much remains to be done, said the troika must deliver its report before any decision is made.
"I do not want to comment on every single statement of which we see many during a single day," she said. "This is the base. I now wait for the troika report, then we will forge our position," she said.