Greece - 'a distressingly sad situation'

Greek unemployment hits 25.4 percent in Aug, new record

Greece's jobless rate rose for a 39th consecutive month to a new record of 25.4 percent in August, more than double the euro zone average, Greece's statistics service ELSTAT said on Thursday.

Reuters,

8 November, 2012

A crippling, austerity-fuelled recession continued to take its toll on the labor market, putting Greek unemployment at more than double the euro zone average of 11.5 percent.

The jobless rate has more than tripled since the country's five-year economic slump began in 2008. It now stands at 58 percent for those aged between 15 and 24 years, compared with 20 percent in August 2008.

Greece's economy is estimated to have shrunk by about a fifth since then. The slump is expected to continue in 2013 when the government is set to take budget cuts and tax increases worth 9.4 billion euros as a pre-condition to receive more funds under its international bailout.

A record 1.27 million Greeks were without work in August, up 38 percent from the same month last year.

Greece's August jobless rate was the European Union's second highest, behind fellow euro zone sufferer Spain, whose unemployment rate stood at 25.5 percent, according to Eurostat.

The European Commission forecast this week that the Greek labor market would bottom out in 2013, with unemployment slipping to around 22 percent in 2014, the economy's first year of modest recovery after six consecutive years of recession.

El-Erian: Really Depressing Numbers Out of Greece

Mohamed El-Erian

CNBC,

8 November, 2012

We should feel a mix of great sadness and heightened concern upon seeing the latest unemployment numbers out of Greece.

According to the data released today, the official unemployment rate rose to a stunning 25.4% in August, setting a new record. More alarming, the jobless rate for 15- to 24-year-olds is 58% – 58%! And there is reason to believe future employment reports will be even worse.

This is a distressingly sad situation.

While the informal sector can alleviate some of the pressure, it provides only limited relief given the scale and scope of the country’s enormous unemployment crisis – one that speaks to widespread misery while suggesting a high probability of a “lost decade” for Greece (we are already three years into the country’s crisis) AND a “lost generation.”

The fabric of any society risks enormous tearing if such joblessness persists. Already, Greece is subject to waves of social unrest, some of which have been quite violent. Only yesterday, TV screens were full of images of rioting citizens in the streets of Athens.

No wonder Greek popular rejection is at extremes not seen before in recent European history; and it is encompassing economic, financial, political and social dimensions.

Some observers even believe that we are close to the point where the Greek government could lose control of the country’s management. And as the experiences of Egypt and Tunisia have shown, do not underestimate what a grass root youth movement can achieve – especially with social media greatly facilitating large-scale mobilization and coordination.

In view of the harmful consequences for so many people persisting for so long, I would absolutely love to be find some hopeful aspects to the Greek numbers. And I have tried really hard.

Yet looking closely at the detailed data and what Greece and its European neighbors are doing about them, it is hard to be positive. And my deep mix of sadness and concern is not helped by the fact that Greece, while certainly an extreme case, is not the only European country with a severe joblessness problem. Upwardly trending youth unemployment rates have already gone above 50% in Spain, and 35% in both Italy and Portugal.

This Greek tragedy looks certain to be with us for a long time to come.