ATHENS – Greece’s 1,033,507 unemployed – and counting – will have their monthly benefits cut by 22 percent, dropping their only source of income during the economic crisis from $604.89 to $471.89, to keep pace with a similar cut in the minimum wage. The cut was slated to go into effect this month but has been delayed until later this year, government officials said, though they did not give a date.
Austerity measures demanded by international lenders as a condition of supplying rescue loans have created a deep recession of 21 percent unemployment, a number that is expected to rise to 25 percent by the end of the year. It is already 51.5 percent for those under 25. The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) insisted on pay cuts, big tax hikes, slashed pensions, the firing of 150,000 workers over the next three years, the end of collective bargaining rights and a 22 percent cut in the minimum wage, although it will be 32 percent for those under 25. Many private companies have also begun to implement unilateral cuts in wages with some workers reporting their pay is being cut 33-50 percent, even more than public workers.
The interim hybrid government of PASOK Socialists and New Democracy Conservatives, who are favored to again lead the vote in upcoming elections while being blamed for creating the crisis, agreed to austerity as a condition of a first bailout of $152 billion and a second pending package of $172 billion from the Troika. That has pushed many Greeks to the edge of poverty and over the line, with soup kitchens, many operated by the Greek Orthodox Church, popping up all over Greece and some farmers taking their products, starting with potatoes, directly to consumers at prices far lower than supermarkets or the daily open air markets known as laiki, as many Greeks say they can’t afford even basic staples anymore because of pay cuts and the big tax hikes, including the doubling of property and income taxes and taxes to the poor imposed by Finance Minister Evangelos Venizelos, who is running unopposed to be PASOK’s candidate against New Democracy leader Antonis Samaras. The election will be held in late April or early May, the government said, although Samaras wants it sooner.
Greece’s economy is estimated to have shrunk by about 20 percent since 2008, when it plunged into its deepest and longest post-war recession. About 600,000 jobs, more than one in ten, have been destroyed in the process. Things will get worse before they get better, according to analysts. “Despite some emergency government measures to boost employment in early 2012, it is hard to see how the upward unemployment trend can be stabilized in the first half of the year,” Nikos Magginas, an economist at National Bank of Greece, told Reuters.
The number in work dropped to a record low of 3,899,319, down 7.9 percent year-on-year. The economically non-active population totaled 4,424,562 people. Worse still, joblessness affects one in every two young people aged between 15 and 24, and even the 35-44 age group is saddled with an unemployment rate of 18 percent. Within 2011 there were 300,000 newly out of work, while the non-active population rose by more than 70,000. The unemployment rate is even greater among women, amounting to 25.3 percent.
The General Confederation of Greek Labor (GSEE) warned that one in every four Greeks will be out of work by the end of the year, with youth unemployment even higher than now, although there are already fewer with work than without among those under 25. “The number of those without a job combined with the reduction in unemployment benefits create an explosive mixture with unpredictable social consequences,” it said. The group added that, “The sacrifices that Greeks are being put through with the aim of emerging from the crisis are not bearing any fruit,” GSEE stated yesterday, while calling for “immediate and effective growth measures for the bolstering of employment, as well as generous social measures for the support of the unemployed.”
Job prospects are growing dimmer too as more than 111,000 businesses have closed and many more are shutting their doors every day, with empty store fronts on virtually every street downtown and in the neighborhoods of Greece’s cities, a 30 percent increase in a year, according to the National Confederation of Greek Commerce (ESEE). An ESEE report published on March 8 showed that 29.6 percent of shop spaces in the city center of Athens were empty last month, up from 23.4 percent a year earlier and 24.4 percent in August. Stadiou Street has suffered the most, due to repeated riots, with 42 percent of stores shut.