More pain in Greece as unemployment hits record

ATHENS Thu May 10, 2012 9:37am EDT

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ATHENS (Reuters) - Greece's jobless rate hit a new record in February, underlining the hardship that drove voters to reject an international bailout and plunge the country deeper into crisis in Sunday's election.

Greece's recession, one of the worst in postwar Europe, has put more than one in five people out of work.

A majority of Greeks on Sunday rejected the terms of a 130 billion euro EU/IMF bailout that is keeping the country solvent but only in exchange for harsh debt-cutting measures.

The election left pro- and anti-bailout parties almost evenly divided and deadlocked over how to form a government. A second poll in a few weeks seems almost certain.

"With unemployment continuing to rise, it may yet push more Greeks into voting for anti-austerity parties," said Alastair Newton, senior political analyst at Nomura, citing the growing risk of a disorderly default and even exit from the euro zone.

Data from Greece's statistics service on Thursday showed unemployment hit 21.7 percent in February from a revised 21.3 percent in January. In the 15-24 age group it rose to 54 percent, explaining the big youth vote for anti-bailout parties, led by the radical Left Coalition.

The data showed nearly 1.1 million people were jobless, 42 percent more than in the same month a year ago, reflecting the damage as the country's 215 billion euro economy continues to contract for a fifth consecutive year.

The sharp labor market deterioration, coupled with cuts in pay and pensions and a bleak economic outlook, have fuelled anger against the pro-bailout mainstream parties which suffered major losses in the May 6 poll.

"I have been jobless for almost a year and the unemployment benefit will soon run out. My wife is still working in retail but she hasn't been paid for three months, so how much worse can it get? We've hit bottom," said Leonidas Goumas, 47, who worked for an electrical supplies firm.

EUROPEAN WARNINGS

He said he would vote again for an anti-bailout party in a new election, despite a string of warnings from European leaders that Greece would be thrown out of the euro currency if it did not stick to the bailout terms.

Greece is fast approaching the plight of Spain where the jobless rate stood at 24.1 percent in March, the highest in the euro zone.

In Greece, unemployment was worst in the country's biggest urban centers, particularly Athens.

"Unemployment is a lagging indicator of broader economic activity. A further rise in the jobless rate should not be ruled out in the following months, although seasonal support may be provided in the summer months, especially in the tourism sector," said economist Platon Monokroussos at EFG Eurobank.

Budget cuts imposed since 2010 under the terms of the bailout have caused a wave of corporate closures and bankruptcies.

The economic hardship has seen a surge in the number of suicides in Greece, a nation that before the crisis had one of the lowest rates in the world.

Last month a retired pharmacist shot himself in the head in the central square of Athens, in front of parliament, shocking the nation.

(Additional reporting by Harry Papachristou; editing by Barry Moody and Stephen Nisbet)

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Comments (2)
bb_canada wrote:
Reality is most of those jobs that were lost were just there because the government was overspending. Greece needs real private sector driven jobs. The government there needs to get out of the way and let people get truly productive again.

May 10, 2012 8:45am EDT  --  Report as abuse
Itri wrote:
Greece still spend too much money on army to German and French arms manufacturers. Its equal to what super powers’s spending ratio. Firstly this country must understand who is their friend ? Germany or France? They only think about their money, their arms manufacturers. Greek people die almost daily..

May 10, 2012 10:03am EDT  --  Report as abuse
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