Greek Unemployment Rate Increases as Recession Deepens
Greece’s jobless rate climbed to more than a quarter of the workforce in August, extending its record high as Prime Minister Antonis Samaras pushed through more austerity measures linked to the country’s bailouts.
The rate rose to 25.4 percent from a revised 24.8 percent in July, the Athens-based Hellenic Statistical Authority said in an e-mailed statement today. That’s the highest since the agency began publishing monthly data in 2004.
The recession and deepening labor slump have been exacerbated by spending cuts and tax increases imposed to trim a budget deficit that was more than five times the euro-area limit in 2009. Violence flared outside the parliament yesterday after more than 50,000 protesters ringed the building as lawmakers debated an austerity bill, approved in the early hours of this morning, with more measures needed to keep rescue loans from the euro area and the International Monetary Fund flowing.
“The troika has to realize that asking Greece for more austerity in the future would be absolutely counter- productive,” said Holger Schmieding, chief economist at Berenberg Bank AG in London. “A lot of austerity is actually too much, as the unemployment data show.”
The parliament will convene again on Nov. 11 to vote on the 2013 budget, a day before euro-area finance ministers meet to discuss whether to unlock funds for Greece. A 31.5 billion-euro ($40 billion) tranche has been frozen since June as Samaras’s coalition government haggled over the measures and a two-year extension to meet the fiscal targets in its March bailout accord.
German Finance Minister Wolfgang Schaeuble said the Greek debt crisis isn’t solved yet and finance ministers may fail to decide on unlocking funds for Greece.
“We’re not out of the woods yet,” Schaeuble said at a panel discussion in Hamburg today. “At the moment, I don’t see how we can take the decision already next week.”
A breakdown of today’s release showed the female jobless rate was 29 percent, while the rate for Greeks aged 15 to 24 was 58 percent. That’s more than double the youth unemployment rate of 24.3 percent in August 2009, before the extent of Greece’s deficit became known, sparking the debt crisis.
“This is a broad-based deterioration,” said Nicholas Magginas, an economist at National Bank of Greece SA in Athens. “The drag from new fiscal measures will continue to have a strong impact for at least the next three quarters, so it’s hard for the situation in the labor market to stabilize right now.”
Greece’s gross domestic product is forecast to shrink 6 percent this year and 4.2 percent in 2013, before growing 0.6 percent in 2014, the European Commission said yesterday. By the end of this year, Greece will have lost a fifth of its economic output since it entered the recession in 2008.
The highest regional jobless rate was in Epirus and part of Macedonia in northern Greece, at 28.5 percent, up from 27.6 percent in July, the statistical authority said. The lowest rate was in Crete, at 19.6 percent.
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