Most Active Stories
Thu June 7, 2012
Greek Unemployment Hits Record High
Originally published on Thu June 7, 2012 3:14 pm
(From Athens, correspondent Joanna Kakissis tells us about the latest news regarding the troubled Greek economy.)
The unemployment rate in Greece has climbed to a new record high of 21.9 percent, the country's statistical service said today. Many Greeks blame budget cuts imposed by its international lenders — who include the European Union, the European Central Bank and the International Monetary Fund — for worsening the country's recession, now in its fifth year. The Organization for Economic Development and Cooperation predicts that recession will stretch well into 2013.
The unemployment rate is now nearly twice the eurozone average of 11 percent. More than 100,000 companies closed last year — and some companies are so short on cash, they haven't paid their employees for months, as we've previously reported.
Nearly all Greeks have seen their wages cut in the last two years as part of an EU-imposed austerity program in exchange for billions in bailout loans. Greece first accepted bailout loans from the European Union, the European Central Bank and the International Monetary Fund in May 2010. A few months before, then-Prime Minister George Papandreou announced that the country was more than $400 billion in debt and that the deficit was nearly three times what the previous government, led by the center-left New Democracy, had reported. The austerity measures in exchange for the loans include wage and pension cuts and tax hikes.
Papandreou tried to put the bailout loan agreement to a public vote by referendum in an attempt to get Greeks to back austerity so they could remain in the eurozone. Polls show that more than 70 percent of Greeks want to stay in the monetary union. But Greeks and European leaders reacted negatively to the referendum idea, and Papandreou was forced to resign last November. His government fell, forcing the country to early elections on May 6. Voters punished Papandreou's center-left party, PASOK, and New Democracy for supporting the harsh terms of the bailout loans. More than half of Greeks voted for anti-bailout parties.
No party won enough parliamentary seats to govern, and feuding leaders failed to form a coalition government. That's why there's a repeat election on June 17.
Public opinion polls show New Democracy running neck-and-neck with Syriza, the country's largest anti-bailout party — though one poll, by respected pollster Public Issue, showed Syriza with a six-point lead. Syriza's telegenic young leader, Alexis Tsipras, says he rejects austerity and wants to renegotiate the bailout terms to link spending cuts to the country's growth rate — but says he wants to stay in the euro. "Greek people aren't asking for money. They aren't beggars," he said in a recent speech. "They are asking for work and the ability to meet their living expenses."
New Democracy leader Antonis Samaras says Tsipras and Syriza's policies will force Greece out of the eurozone. "They are like children playing with matches in an arsenal," Samaras told the Athens Chamber of Commerce and Industry in a recent speech laying out his economic agenda. "They want a return to the days of the big state."
Samaras is trying to frame the election as a referendum on the euro.