Unemployment in Greece hit a record high of 25.1 percent in July as the country’s financial crisis continues to exact its heavy toll, official figures showed Thursday.
And all indications are that unemployment in Greece will continue to rise. The Greek economy has shrunk by around a quarter since the recession started in 2008 and youth unemployment has pushed way above 50 percent. 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 percent 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 11.4 percent, 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 percent. In July 2008, a year before Greece’s acute financial crisis broke, there were only about 364,000 registered unemployed.
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, such as spending cuts and tax increases, 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 (EURO)13.5 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 have enough money to pay all its financial obligations and may end up defaulting on its debts and leaving the euro.
Finance Minister Yiannis Stournaras will hold talks Thursday evening with representatives of the European Union, International Monetary Fund and European Central Bank. The so-called 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 (EURO)12.64 billion, lower than the (EURO)13.5 billion target. Although revenues were (EURO)1.3 billion off target, spending was (EURO)2.2 billion less than budgeted.
The Associated Press