The unemployment rate in Greece has hit 27 percent, more than double the euro zone’s average rate of 11.7 percent, according to new statistics published February 14, meaning that one in every four people who want to work can’t find a job. For the youths it is a complete disaster. Youth unemployment in Greece has hit 62 percent, in other word, the majority of people ages 15 to 24 are unemployed.
Greece’s young people - nothing much to do
The latest unemployment figures published by the Hellenic Statistical Authority reveal an economy with huge problems. Greeces young people can expect to study, graduate, and then be unemployed. This could escalate when they reach adult age later. The Greek government, already in a bad fiscal shape, will see its income tax revenues shrink further.
The total number of unemployed is over 1.3 million. However, this doesn’t include those who have been unemployed for so long that they can no longer receive benefits. According to Greek Reporter, the true figure could be as high as 2 million, which would make it 40 percent of Greece’s 5 million-strong labor force.
Greece is mired in its sixth year of recession. The state is technically bankrupt and has been relying on international rescue loans to keep it afloat for nearly three years. In return for the bailout, the government has imposed major spending cuts and tax hikes which have hammered the economy, causing an increase in poverty and forcing thousands of businesses to close.
The economy contracted a further 6 percent in the fourth quarter of 2012 from the previous year, the statistics agency reported Thursday. That followed annual contractions of 6.7, 6.4 and 6.7 percent in the previous three quarters of 2012. As recent as 5 years ago, the Greek GDP was at least 40 percent higher than states like Malaysia, Singapore or Hong Kong, it has now fallen behind all three of them.
A study by Greece’s largest labor union, GSEE, released this week projected that 3.9 million out of Greece’s total population of nearly 11 million, or 35.5 percent, will be officially living in poverty by the end of the year, compared with 3.1 million in 2011. The poverty line in Greece is set at a personal income of less than 600 per month.
“We have 250,000 people every day trying to get to the church to find food, this is a humanitarian crisis,” said former Greek MP Eva Kaili. “We’re talking about young people that cant find a job in Greece, that are trying to leave the country.”
These are huge figures, the type that cause huge social upheaval. These numbers equate to millions of frustrated, hopeless, or even depressed individuals and countless struggling families. European leaders may claim the euro zones economic crisis has been tamed. These numbers however, prove them wrong.
Several hundred pensioners marched to the Labor Ministry in heavy rain Thursday to protest the new tax increases. “We are not just talking about some problems. They are taking our lives away,” Dimos Koumbouris, leader of Greece’s main pensioners association, told the AP. “We can’t pay our electricity bills, or the emergency taxes. We haven’t enough for our medicines, and it’s putting our lives in danger.”
European countries, led by Germany, is due to send Greece another 5.6 billion euros in aid next month, but Kaili says the large sum won’t go very far. “We have to pay what we owe. The money that comes in goes right back out,” she said. Until recently, Greece had a typical European health system offering universal care, but now this has been cut off.
Ioannis Kouzis, associate professor at Panteion University’s social policy department and adviser to GSEE, said “There are 470,000 families where none of the members is working. When the (austerity) measures started, unemployment was at 9 percent. Since then, incomes have been crushed and the official unemployment rate has reached 27 percent.”
Asia currently possess unemployment rates major European states can only dream about. In Europe, 8.2 percent of British labor force remain unemployed, Germany 7.4 percent, France 9.4 percent, Italy 11.2 while Spain a catastrophic 26 percent. For the fiscally strong European nations, Switzerland is pretty well off at 3.4 percent while oil giant Norway, the Saudi Arabia of Europe, has only 2.8 percent unemployed.
In China the unemployment rate is 4.1 percent, 3.2 in South Korea, 4.2 in Japan, and 3.8 in India. It gets even better for Malaysia (2.9 percent), Singapore (2 percent) and Macau 1.9 percent. Thailand, a population of 66 million, has an amazingly low 0.5 percent unemployment rate.
Crowds queuing to buy luxury items in Asia
After the 1997-98 crisis, Asian states have also staked up massive foreign reserves to protect themselves against another financial shocks. China has the world’s largest foreign reserves at $3.3 trillion, Japan $1.3 trillion, Taiwan $400 billion, South Korea $330 billion, Hong Kong $300 billion, India $295 billion, Singapore $260 billion, Thailand $182 billion and Malaysia $140 billion.
For comparison, in Europe, Switzerland has a foreign reserves worth $530 billion, Germany $260 billion, France $190 billion, Italy $182 billion while the U.K. $134 billion. Greece has a mere $7 billion in foreign reserves.
The Asians have also built up powerful sovereign wealth funds. China is extremely rich in cash, a factor that allows it to invest across the globe in time of crisis. The 4 major Chinese sovereign funds hold a total assets of $1.2 trillion. In Singapore, its 2 sovereign funds, Temasek Holdings and GIC, hold assets worth up to $405 billion. Hong Kong’s HKMA has assets of approximately $300 billion. Malaysia’s 2 biggest sovereign funds, Khazanah Nasional and PNB hold $100 billion in assets.
European governments do not normally setup sovereign wealth funds, though oil-rich Norway did. The Norwegian GPF, Europe largest sovereign fund, hold an assets worth $665 billion.