Greek unemployment at record high

Thu, Jun 14, 2012, 01:00

Greek unemployment hit a record high in the first quarter of 2012, data showed today, days before the country votes again on whether to back the harsh austerity needed to appease international lenders or risk a chaotic exit from the euro zone.

The jobless rate hit 22.6 per cent in the first three months of the year - double the euro zone average - reflecting the deep economic malaise that forced many voters to reject austerity in an inconclusive election early last month.

The data will provide ammunition to politicians campaigning against the bailout terms imposed on the country by the IMF, the EU and European Central Bank.

Pollsters say the vote is too close to call. The last published surveys showed the conservative New Democracy party, which backs the €130 billion bailout, running neck-and-neck with the leftist SYRIZA, which wants to cancel the rescue deal.

The statistics service said the number officially unemployed reached 1.12 million in the first quarter, up 57.3 per cent year-on-year, feeding public discontent and hurting consumer confidence ever more.

"Employment is still shrinking rapidly in construction and manufacturing. Even the more resilient sectors like wholesale, retail trade and tourism are taking a hit," said National Bank economist Nikos Magginas.

In the year to the end of March, the number of jobs in the construction sector fell 18 per cent while those in the manufacturing sector dropped 15 per cent, based on Reuters calculations.

Mr Magginas said falling labour costs and progress in corporate restructuring should help contain the trend in the medium term but weakness in tourism does not bode well in the quarters ahead.

Tourism, which accounts for about one in five jobs, is expected to turn out weak this year. Revenue tumbled by 15.1 per cent to €396.3 million in the first quarter, central bank data showed.

After almost five years of severe recession, those Greeks who can are seeking work abroad.

"I was lucky to find work in my field in Ireland at a small software firm with good terms," said Argyris Markakis (29) who will move to Ireland soon after unsuccessfully searching for work for months in Greece.

"I don't see the job market improving any time soon with these policies of austerity," he said. "I decided to quit my former job after the firm I worked for fell four months behind in paying our salaries.”

The statistics agency data showed unemployment rose from 20.7 per cent in the previous quarter and 15.9 per cent in the same period in 2011. Greece is now fast approaching the jobless plight seen in Spain, where unemployment hit 24.4 per cent in the first quarter.

Young Greeks have been hardest hit by the country's protracted economic slump. In the 15-24 age group the jobless rate was 52.7 per cent, the data showed, up from 39.6 per cent in the same period a year ago.

This has driven many young people to vote for the radical leftist SYRIZA party, which came second in last month's election and which is hoping to do even better this time.

The party has promised to renegotiate the bailout and ditch or dilute the austerity measures that go with it, a move the country's lenders say may force Athens to leave the euro zone.

Greece's €215 billion economy slumped by 6.5 per cent in the first quarter and is projected to remain in recession for a fifth consecutive year in 2012, contracting 5.0 to 5.3 per cent based on central bank and OECD forecasts.

The economic downturn is making it harder for the government to meet revenue targets and cut the budget gap, raising the risk that yet more belt-tightening may be necessary.

Reuters