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UPDATE 1-More pain in Greece as jobless rate hits new high
June 7, 2012 / 12:36 PM / 6 years ago

UPDATE 1-More pain in Greece as jobless rate hits new high

* Jobless rate worsens to 21.9 pct in March, hits new high

* Nearly 1.1 million without work, most in big cities

* More than one in two young people without jobs

By George Georgiopoulos

ATHENS, June 7 (Reuters) - Greece’s jobless rate hit a record high in March, data showed on Thursday, piling more misery on Greeks and giving ammunition to politicians campaigning against the nation’s bailout terms in a parliamentary election on June 17.

ELSTAT, Greece’s statistics service, said that unemployment hit 21.9 percent in March, up from a downwardly revised 21.4 percent in February, with 1.075 million people out of work.

It was a sharp rise from the same month a year ago when the unemployment rate was 15.7 percent, meaning 342,134 jobs have been lost since then, underscoring the depth of a recession that is already in its fifth year.

“The situation is really bad, no one is hiring,” said Christina Tsakalou, 40, who lost her job as a store manager in a clothing store.

“My unemployment benefit is 360 euros ($450) a month and will run out in four months. I don’t see things improving.”

Many retail companies were downsizing as squeezed consumers cut their spending, she added.

Unemployment was worst in the country’s big urban centres, particularly in Athens where it stood at 22.6 percent.

In the 15-24 age group the jobless rate was much higher - 52.8 percent - a factor that prompted many young people to vote for the radical leftist SYRIZA party in an election last month that failed to produce a viable government.

SYRIZA, which came second and is riding high in the polls ahead of this month’s election, promises it will renegotiate a 130-billion-euro 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 jobless rate is almost double the euro zone average, which stood at 11 percent in March, and is fast approaching that of Spain, which hit 24.4 percent in the first quarter.

The sharp deterioration in the Greek labour market, coupled steep cuts in pay and pensions prescribed by the European Union and International Monetary Fund, has fuelled anger against the two main parties - New Democracy and socialist PASOK - that back the bailout.

Both shed voters in the May 6 election, even though New Democracy managed to narrowly win.

Supporters and opponents of the bailout are running neck and neck in opinion polls for the June vote.

“Unemployment is usually a lagging indicator of broader economic activity,” said Platon Monokroussos, an economist at EFG Eurobank. “It appears the jobless rate has not yet peaked, although some support may be provided during the summer months from the tourism sector.”

But recent industry reports suggesting a slowdown in tourist arrivals were a worry, he said - the sector accounts for 15 percent of output and one in five jobs.

Tourism receipts tumbled by 15.1 percent to 396.3 million euros in the first quarter, according to central bank data.

Greece’s 215-billion-euro economy is expected to contract by between 5 and 5.3 percent this year based on estimates by the Bank of Greece and the OECD.

“If tourism which is labour intensive turns out weaker than last year, the jobless rate is likely to rise further,” said Elias Lekkos, an economist at Piraeus Bank.

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